Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — SOCIAL SECURITY

Invalidity Benefit

Mrs. Helen Jackson: To ask the Secretary of State for Social Security if he will make a statement on his plans for invalidity benefit.

Mr. Malcolm Bruce: To ask the Secretary of State for Social Security what representations he has received about the future of invalidity benefit; and if he will make a statement.

The Secretary of State for Social Security (Mr. Peter Lilley): Invalidity benefit is being reviewed in the context of the fundamental review of social security expenditure. Many representations have been received. No decisions have been made, but when they are I will make a full statement to the House.

Mrs. Jackson: Is the Secretary of State aware that, in Sheffield, the number of medical assessments for people on invalidity benefit has increased in every month since February, so that it is now 70 per cent. higher than it was in February? Is he also aware that, to use the words of a constituent who went for a medical assessment, it was undertaken in a way that made her feel "a criminal and a

scrounger"? Will the Secretary of State, therefore, assure all the many people who are already sick and depressed from being out of work that they will not suffer continual harassment and worry that their income will be removed?

Mr. Lilley: I am grateful to the hon. Lady for writing to me about that case. I assure her that I have asked a senior medical officer in the area to look into her constituent's interview and report the details to me. Obviously, I would not like anyone to feel harassed in the way that she describes.
The number of people applying for invalidity benefit has remained pretty constant in recent months throughout the country, whatever may have happened in particular regions, but, over the longer term—since 1979—the number of people receiving invalidity benefit has increased from 600,000 to 1·5 million, at a time when the nation's health has improved. It is only natural, therefore, that we should examine the benefit and see whether the arrangements for it can be improved.

Mr. Bruce: Will the Secretary of State acknowledge that the sooner he can make a decision on that the better, and that many people who receive invalidity benefit are deeply concerned and angry that the Government may be targeting them—the poorest and most vulnerable members of the community—when wealthy donors to the Conservative party appear to be trying to persuade the Government to ensure that their incomes are protected? Can that be just and fair?

Mr. Lilley: The second half of the hon. Member's question makes it clear that he is not seriously concerned about those on invalidity benefit. He is just trying to make cheap jibes at their expense. Nothing that has been said by the Government, or in any of the documents allegedly coming from us, would give rise to the fears that he mentions. Only the scaremongering of Opposition Members suggests that there is any targeting of people on invalidity benefit. Our objective is to ensure that those who are genuinely sick and disabled receive help and that it is not diverted to those who would be better off either working or on benefits that would help them back to work.
That seems to me a logical and positive approach, which those who have a genuine incapacity to work fully and whole-heartedly support.

Mrs. Roe: Does my right hon. Friend share my view that his proposals to consult fully on a test of ability to work will be welcomed widely by the medical profession? Is he able to tell the House whether his Department has received any representations from doctors on the tightening up of procedures and current rules?

Mr. Lilley: I agree with my hon. Friend that most people think that it is sensible to consider an objective medical test. We are considering it and we shall see whether it is possible to develop one. If so, we will consult fully about it. Since we began the tightening up of procedures under the existing legal powers in February this year, we have received about 300 letters from doctors, all but three or four supporting the changes that we are making and saying that it is sensible to tighten up, and that the previous arrangements were unsatisfactory for them as well as for their patients.

Mr. Ward: Does my right hon. Friend agree that, while we all want applicants for state help to be sympathetically and courteously dealt with, he should not be deterred from carrying out a full review of all aspects of social security spending by all the smears and innuendo put about by the Labour party? Does he further agree that such a review is the only way to make sure that the money goes to those in need and not to those who would just like a little bit extra?

Mr. Lilley: My hon. Friend is absolutely right. We have to carry out a deep and far-reaching review. The objective of that review is to end up with a better system, in the sense that it guarantees the position of the most vulnerable and needy in society and does not outstrip the nation's ability to pay. If we allowed the system to outstrip that ability, it woud collapse under its own weight and put at risk the very people who depend on it. Opposition Members who believe that nothing need be done are putting at risk those who depend on the system.

Mr. Bradley: Is not it quite incredible that the Secretary of State accuses the Opposition of scaremongering and fails to deny that he will cut benefits to the sick and disabled who will have to pay the price for your economic impompetence? [HON. MEMBERS: "Order."] Does not he realise that the average invalidity benefit payment is £79 a week, which is well below the national average? Those people will suffer hardship if you tax it, thus reducing the amount of benefit to which they are entitled. If you add to that the heartless decision to stop payments to the independent living fund for the terminally ill because the Government refuse to resource the fund sufficiently—this is not scaremongering—that is a tax on the sick and disabled because the Government are trying to cut public expenditure. Will the right hon. Gentleman today stop the attacks on the sick and disabled and make sure that they have the amounts to which they are entitled, so that they may live and die in dignity and independence?

Mr. Lilley: I am grateful to you, Madam Speaker, for sharing some of the unwarranted blame that we have to face on this issue. Whenever we have reformed and changed benefits, we have always protected the position of existing claimants. Everybody knows that and people have our track record to go on. Equally, we have made it clear

for many years, since the Chancellor of the Exchequer announced that it was our long-term intention to tax all income replacement benefits, that that has been our intention in the case of invalidity benefit, as elsewhere. Because of practical difficulties, we found it impossible to do that. However, most people would agree that it is sensible that a benefit that replaces income should, where possible, be treated like income and taxed for people who have other income to accumulate with it. The hon. Gentleman seems to think that money grows on trees and that it is just a matter of the Government pouring endless, additional sums into the benefit system. We have increased expenditure by two thirds in total, but growth must be contained within the nation's ability to pay.

Social Security Payments

Mr. Fishburn: To ask the Secretary of State for Social Security what percentage of central Government spending will go in social security payments this year; and what the figure was in 1979.

Mr. Lilley: Expenditure on social security accounts for more than 30 per cent. of total Government expenditure. In 1978–79, the proportion was just 24 per cent.

Mr. Fishburn: Do not these figures show that, unless something is done about it, the growth in social security will overwhelm us all? Is not the main intellectual and political question for the Conservative party to seek to constrain that giant in the years ahead? Does my right hon. Friend agree that there is no better place to start than to set a date for the equalisation of the age at which men and women may retire?

Mr. Lilley: My hon. Friend is right; we have to start thinking now about these problems if we are to ensure that they are tackled sensibly and that we or a future Government are not forced into arbitrary cuts later. Every Government in the world face such a problem. Some, who perhaps have shown less foresight than us, have been forced into difficult and arbitrary decisions. Last week, the German Government had to announce nearly £10 billion of cuts, including real cuts of 3 per cent. in many benefits.
We are committed to introducing an equal pension age for men and women and we shall make an announcement on that in due course. It would not be sensible to make an announcement before we have heard the Coloroll decision from the European Court of Justice, which should clarify the position on the equalisation of private pensions. We are proceeding in an orderly and speedy fashion to that end.

Mr. Frank Field: Does the Secretary of State accept that he is panicking over his review of social security expenditure? Has he taken note of the Prime Minister's statement that 70 per cent. of the public sector borrowing requirement is due to cyclical—that is, unemployment—effects on the Government's budget? If that is so and the Secretary of State takes the Prime Minister's words to heart, should not he relax over the whole process?

Mr. Lilley: The hon. Gentleman forgets that we have set a new control total for public expenditure that deliberately excludes the cyclical rise in spending on the unemployed because we believed that it was right, morally and economically, to finance that rise as the economy went into recession. As we come out of recession, it is equally


right and proper to keep to the same total and ignore, therefore, the cyclical beneficial effects on unemployment. Otherwise, there would be a permanent ratchet effect—every time there was a down turn, the level of expenditure would be raised and it would never be allowed to recover. Even if one excludes unemployment, the underlying rate of growth of spending on social security spending has been 3 per cent. a year in real terms during the 1980s and is set to be 3·3 per cent. up to the end of the century. That is something which must be taken into account in any long-term review.

Mr. Forman: Is not the most disturbing consequence of the seemingly inexorable increase in social security over this long period the way in which it produces disincentives for people to take low-paid jobs? Is my right hon. Friend aware that one of my constituents, who saw me at my surgery on Friday, said that he has the possibility of taking a new job, largely on commission, selling insurance for £30 a week, plus any commission, whereas his existing income on income support is £300 a week? He complained that, when there is a disparity of that kind, where is the advantage of getting back into regular work?

Mr. Lilley: My hon. Friend points to a difficult problem that arises especially acutely in the case of those on income support who get help with their mortgage payments. I do not think that it is possible to resolve that problem simply by extending that help to people in work, except at the potential expense of several billion pounds, which clearly is not affordable in any foreseeable circumstances. Therefore, we have to look at other ways in which we can try to improve incentives in the system and, of course, we are doing so.

Mr. Dewar: Does the Secretary of State accept that many people are worried about the treatment of lone parents in future social security budgets following the speeches made by Ministers this weekend, some of which seemed to give the impression that lone parents were a feckless group of social outcasts? Is not it the case that 70 per cent. of lone parents are divorced, separated or widowed and that teenage unmarried mothers, so often represented as typical, are only a small minority of the total? Ministers preach family values, but does the Minister accept that their policies constantly undermine family stability?
Did the right hon. Gentleman notice—[Interruption.] Did the Secretary of State notice that statistics produced by his own Department in the past week showed that, in 1979, 19 per cent. of lone parents had a family income of less than half the national average? By 1991–92, that figure had grown to 60 per cent. Rather than simply criticising lone parents publicly, would not it be right for Ministers to concentrate on helping the vast majority who want to earn their keep, by improving affordable child care facilities, training opportunities and job opportunities?

Mr. Lilley: The hon. Gentleman is wrong on most points. The largest, fastest-growing group of lone parents —they cover a variety of different categories—is the "never married" category. The important thing is that we are not against any category of people and we are certainly not against lone parents. We are in favour of parents—both parents—accepting responsibility for their children and offering them love, affection and support. The state can and must sometimes step in with monetary help if

marriages break down and the parents are unable to support their children. However, we can never substitute for that love and commitment.
Everyone notices that Opposition spokesmen, with one or two notable exceptions, never say anything good about the family and they always seem to support alternatives to it. That is, I imagine, why one anonymous leading Labour figure is quoted in The Independent today as saying that the hon. Member for Glasgow, Garscadden (Mr. Dewar) should stop trying to defend the indefensible. I agree with his colleague the hon. Member for Sheffield, Brightside (Mr. Blunkett) who, in a "carefully worded statement" according to The Independent, made it clear that Ministers were right to tackle the issue of single parents. He said
We need … real action to reinforce personal responsibilities. That means acceptance by fathers of their obligation towards their children and … housing policies which do not encourage the belief that the only way to a home is having a baby.
I agree with the hon. Gentleman.

Family Support

Sir Anthony Durant: To ask the Secretary of State for Social Security what is the annual spending on family credit; and what was the spending on family income supplement in 1979.

Mr. Amess: To ask the Secretary of State for Social Security how many awards of family credit have been made since the introduction of the scheme.

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt): Family credit expenditure for 1992–93 was £864 million. This is 13 times more in real terms than the £24 million spent on family income supplement in 1978–79. Since its introduction in April 1988, more than 3,750,000 family credit awards have been made.

Sir Anthony Durant: In spite of earlier criticisms of the scheme, does my hon. Friend agree that the average payment is now £42 a week and that more than 80 per cent. receive at least £20 a week, which is an incentive to getting back to work? Is it not a better scheme than the earlier one?

Mr. Burt: My hon. Friend is quite right. The average award now compares favourably with the average award of family income supplement, which, at current prices, would be about £17·40 a week, compared with the present average of £44 a week. The average for the self-employed is £55 a week. The numbers currently in receipt of family credit are at a record of 457,000. The scheme is fulfilling its aim of directing resources to where there is most need.

Mr. Amess: Will my hon. Friend confirm that a family credit helpline was introduced in March this year, thus fulfilling another election manifesto commitment? Will he also confirm that our right hon. Friend the Secretary of State is conducting an advertising campaign to help unemployed families better to understand the benefits to which they would be entitled when in work?

Mr. Burt: My hon. Friend speaks for some 1,300 family credit recipients in Basildon. I am pleased to tell him and them that our helpline, which now caters for potential as well as existing claimants, has received 250,000 calls so far. My hon. Friend is also right to say that the latest take-up


advertising campaign is aimed at the unemployed and informs them of their potential to receive family credit, which can act as a real incentive to getting back to work.

Mr. Pike: Is not one of the reasons for the large increase in amounts paid out in family credit the large increase in the number of people on low pay as a result of Government policy? Will the Minister tell us how many people on low pay and living in poverty are entitled to family credit, but, unfortunately, not getting it?

Mr. Burt: The hon. Gentleman fails to distinguish the fact that the most important determinant in family credit is not the size of the wage, but the number and the age of the children. Part of his anger comes from the fact that family credit is a better system than any supported by the previous Labour Government.

Mr. Rooney: In view of the Minister's comments about the spectacular increase in the numbers receiving family credit and about the amount of the awards, when can we expect the Government to undertake a responsible review of how the money is distributed? How much impact has there been from the change in working hours from 24 to 16? Why does the Minister not look again at the clawback of 94 per cent. for anyone receiving an increase in wages?

Mr. Burt: About 60,000 extra families have received family credit as a result of the change of hours from 24 to 16 as the entry to family credit. We keep the scheme constantly under review. I am sure that the hon. Gentleman shares my pleasure in the fact that take-up is increasing both for expenditure and for case load. Take-up by case load is 14 per cent. higher than it was five years ago and expenditure is 6 per cent. higher. I am sure that the hon. Gentleman welcomes those figures.

Mr. Harry Greenway: Does my hon. Friend agree that family stability comes best from children being born of a loving relationship between a man and a woman? The strong movement towards girls and very young women to have babies to get flats and houses is damaging to them and to the children, because those children do not have the proper background that they should have. Will my hon. Friend consider that point and do all that he can to encourage proper family stability, because it is the bedrock of the nation?

Mr. Burt: Behind some of the newspaper rhetoric over the weekend have been sensible comments from hon. Members of all parties and from a variety of commentators on the issues raised by single parenthood. Family structure is important. It is the responsibility of social security to protect the most vulnerable and it is too often forgotten that the most vulnerable element in a single-parent family is the child. We ought to hear more about the child's situation than about the rights and responsibilities of everyone else.

Mrs. Golding: Given the big increase in the need for families to have family credit, does not the Minister think that, instead of proposing the withdrawal of all benefits from mothers with children who have been recently abandoned by their fathers, the Government would do better to concentrate their efforts on eliminating poverty wages and the threat of unemployment, as that would do more to stabilise family life? Or does the Minister agree with his right hon. Friend the Secretary of State for Wales who believes that penalising children is the right answer?

Mr. Burt: There is no question of withdrawing benefit in the manner suggested by the hon. Lady. It is important that the social security system acts to protect the most vulnerable. The hon. Lady will also understand that the most important thing that any Government can do for the poorest is to improve the jobs situation. The Government are determined to improve that situation by keeping inflation and interests rates low. It should be noted that the prospects for growth in this country are significantly better than in the majority of countries abroad. I would have hoped that the hon. Lady would welcome that development.

Pensioners (Income)

Mrs. Lait: To ask the Secretary of State for Social Security what has been the change in pensioners' total incomes since 1979.

The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague): In the decade following 1979, pensioners' average incomes increased by 30 per cent.

Mrs. Lait: Will my hon. Friend confirm that the income of pensioner couples, excluding housing costs, has risen by almost a half since 1979, allowing for inflation? Will he further confirm that the proportion of pensioner couples in the lowest income groups has fallen from 19 per cent. in 1979 to 11 per cent. now? Does he agree that those figures show that pensioners are better off under a Conservative Government?

Mr. Hague: My hon. Friend is absolutely right. She rightly draws attention to the figures published last week showing that the total incomes of pensioner couples have risen by 48 per cent., excluding housing costs, since 1979. That is largely because of the growth in occupational pensions and in income from savings. But the Government have always recognised that not all pensioners have shared in that increased prosperity. That is why extra resources have been concentrated on helping the oldest and poorest pensioners.

Mr. Winnick: Is the Minister aware that, last week, a strong deputation of pensioners from all over the country came to the House and that they were deeply anxious that their standard of living will be further eroded as a result of the introduction of VAT on domestic fuel? Does the Minister recognise that, in this country, there remain literally millions of pensioners who are living on the very smallest of incomes? That have not benefited in any way from occupational pensions and now find themselves living day by day, virtually on the breadline. Are not the Government largely responsible because they have refused to increase the pension in line with earnings? Should not they be thoroughly ashamed of themselves?

Mr. Hague: My right hon. Friend the Secretary of State and other members of the Government have always made it clear that extra help will be given before the increase in VAT takes effect next year. That help will be additional to the automatic increase in pensions and other beneftis that will reflect the impact of any increase in fuel bills. But the hon. Gentleman should remember that, in the past 14 years, total expenditure on benefits for the elderly has


increased by 40 per cent. in real terms, to a level never dreamt of by any previous Labour Government. The Opposition should remember that on all occasions.

State Pension Age

Mr. Jacques Arnold: To ask the Secretary of State for Social Security what is his current estimate of the additional cost of equalising the state pension age at 60 years.

Mr. Hague: The cost would be around £4 billion a year more than the current scheme at 1992–93 prices.

Mr. Arnold: Would not the reverse be true if equalisation were to take place at a higher level? Would not there be considerable savings—amounting to billions of pounds—in the social security budget, which could be redirected to those most in need? Is not that why Germany and the United States are well on the way to equalising at a higher level and why Denmark has already done so?

Mr. Hague: My hon. Friend is right to point to the action taken by other countries in equalising, and in some cases increasing, their state pension age. Obviously, large savings stand to be made in those countries' expenditure. The Government are still considering all the options. No decision has yet been taken, but one will be announced in due course.

Mr. Bennett: Is the Minister aware that the Government's continual dithering over this matter is causing a lot of hardship to people who have to make logical decisions about their retirement? Does he accept that what would help most people would be to offer a flexible retirement age between 60 and 65 to suit individuals and their savings?

Mr. Hague: Accusations of indecision or dithering come strangely from a party whose policy on this matter is shrouded in the deepest mystery and is likely to remain so for some time. The Government have received 4,000 responses to their consultation document about the state pension age. It is fair and proper to give full consideration to all those responses and to await the European Court judgment, which was mentioned by my right hon. Friend the Secretary of State, before reaching a decision on any of the options, including a flexible retirement age.

Social Fund

Lady Olga Maitland: To ask the Secretary of State for Social Security how many payments have been made since the introduction of the discretionary social fund.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott): Since the discretionary social fund was introduced in 1988, more than 7·2 million grants and loans, worth more than £1·2 billion, have been awarded.

Lady Olga Maitland: I thank my right hon. Friend for that most encouraging news. Will he confirm that, since the introduction of the social fund, more than £300 million has been given to community care projects and more than £800 million in interest-free loans? Is not that another good example of the Government targeting those most in need?

Mr. Scott: I have no doubt at all that, in the five years of its life, the social fund has demonstrated its ability to

respond flexibly to need at the margins of the overall social security system and to control expenditure—something which its predecessor manifestly failed to do.

Mr. Skinner: Why do not the Government admit the facts—that during their period in office, they have allocated £26·2 billion in tax cuts to the richest I per cent. of people in Britain, yet they have the cheek to tell people who are living below the poverty line that they cannot get money from the social fund? This Government stink to high heaven.

Mr. Scott: I am tempted to respond to the gross discourtesy shown by the hon. Gentleman earlier in our proceedings by ignoring his question. Instead of doing that, I shall say that the social fund has responded to need and that Governments of all political colours have always found that, at the margins of any social security system, there is a need for a flexible response to special need. The social fund has provided such a response. The single payments scheme was doubling in cost every two years and had simply become unaffordable. I believe that we were right to bring that expenditure under control while meeting special needs.

Benefits Uprating

Mr. Simon Coombs: To ask the Secretary of State for Social Security how much was spent on uprating benefits in April.

Mr. Lilley: The uprating of all the main benefits by 3·6 per cent. in April this year cost an additional £2·5 billion.

Mr. Coombs: Does my right hon. Friend agree that it is essential that the Government, like other Governments, should live within their means when it comes to the social security budget? Is not it significant that the French Government have just announced that there will be no pension uprating in July this year and that they propose to claw back £3·8 million in health charges? Has my right hon. Friend also noted that the German Government propose a 3 per cent. cut in benefit across the board? Is there an example to be followed in all that, and will he follow it?

Mr. Lilley: My hon. Friend puts his point extremely clearly. He will recall that, before the announcement of last year's public expenditure round, we heard scaremongering throughout the summer to the effect that we would have to make such a draconian cut. None of the scares that were run by the hon. Member for Glasgow, Garscadden (Mr. Dewar) turned out to be true. We fulfilled the uprating that was then necessary. We believe that it is sensible to carry out sensible structural reforms. We have begun that process with the long-term review. We have commitments and we have kept to them, unlike the Labour party, which singularly failed to do so when it was in power.

Dr. Godman: In the light of the decision of the Secretary of State to accept the judgment of the European Court of Justice—case number C328/CF91—will he ensure that all the women concerned, who will benefit directly from that judgment and his belated acceptance of it, will not only receive the benefits to which they are entitled under European Community law but will be paid all arrears dating back to this April? Will he give an assurance that he


will not now proceed with his appeal at the Court of Appeal against Commissioner Skinner's decision, CS27/91?

Mr. Lilley: He is no relation, I trust, of the hon. Member for Bolsover (Mr. Skinner).
As I do not keep in mind a catalogue of all European Court cases by number, I shall write to the hon. Gentleman when I have traced that case number. We have no option but to accept the rulings of the European Court of Justice since it overrides the authority of the House.

Single Mothers

Mr. Riddick: To ask the Secretary of State for Social Security how much was provided by his Department in benefits to single mothers in 1975, 1980 and the last year for which figures are available.

Mr. Burt: Although changes in the benefits system mean that figures for 1975 and 1980 are not available, expenditure on benefits for all lone parents has increased from £2·4 billion in 1981–82 to £6 billion in 1991–92 at constant prices.

Mr. Riddick: Those are pretty incredible figures. Does my hon. Friend agree that, when the welfare system encourages young women to have babies out of wedlock so that they can qualify for council houses and benefits, perhaps the system has gone too far? Will he confirm that the Government will take action to extend and encourage parental responsibility, particularly paternal responsibility?

Mr. Burt: There are many reasons why there has been a greater number of single parents in the past 20 years or so, including a greater tendency to divorce and separate, as well as a rising number of single, never-married young mothers. The responsibility of social security is that, whatever the relationship between parents may have become, a child has a right to be financially protected: in the first instance, by its natural parents, and the Child Support Agency will reinforce that; secondly, by providing what incentives we can for mothers to go back to work, where appropriate, because all the evidence that we have shows that the majority of single mothers want to get back to work; and, thirdly, where children are left vulnerable, they must be protected by the rest of society.

Ms Glenda Jackson: Will the Minister take this opportunity to condemn unreservedly not only the question put by the hon. Member for Colne Valley (Mr. Riddick) but the speech made by the Secretary of State for Wales over the weekend, which quite outrageously alleged that young women deliberately make themselves pregnant to benefit from housing and social security benefits, when the Minister knows, as do Conservative Members, that there is absolutely no evidence whatever to support those scurrilous allegations? Will he further assure the House and the country that no woman and her children will be denied benefit because she will not name, or the Government cannot find, the father?

Mr. Burt: It was clear this weekend that the issue of single parenthood has now been raised, and a variety of sensible comments have been made by hon. Members on

both sides of the House. My right hon. Friend the Secretary of State mentioned the quote from the hon. Member for Sheffield, Brightside (Mr. Blunkett).
In addition, my right hon. Friend the Secretary of State for the Environment said that Britain had moved on, quite rightly, from the unacceptable situation where single mothers were ostracised but
as a society we have to think seriously about how we try to help single mothers and I am not at all sure that putting them on their own with their children is the best way.
The hon. Member for Croydon North-West (Mr. Wicks) wrote an interesting article on single-parent policy, which appeared in The Guardian today. The issues have now been raised and, provided they are discussed sensibly and in a straightforward way, some of the problems that affect single parents, and therefore society, can now be sensibly considered.

Child Benefit

Mr. Congdon: To ask the Secretary of State for Social Security how many increases in child benefit have been announced in the past two years.

Mr. Burt: Since April 1991, there have been four increases in child benefit rates—in April and October 1991 and April 1992 and April 1993. These have increased the pre–1991 rate of £7·25 a week for each child to the current rate of £10 a week for the eldest eligible child and £8·10 a week for all other children.

Mr. Congdon: Will my hon. Friend confirm that the Government have pledged to retain child benefit as the cornerstone of their policy for helping all families with children? Will he further confirm that the annual uprating of child benefit, in line with the increase in prices, fulfils that pledge? Does he agree that the greatest threat to universal benefits is the threat to means-test them, which emanated from members of the Labour party?

Mr. Burt: Yes, what we know from the Commission of Social Justice, which is not very much, shows that my hon. Friend is right to have such suspicions. Child benefit remains the cornerstone of our policy; but since 1988 the Government have been able to find additional resources worth £1 billion, which have been made available to the least well-off families with children. That is a record of which to be proud.

Oral Answers to Questions — CHURCH COMMISSIONERS

Church Congregations

Sir Michael Neubert: To ask the right hon. Member for Selby, as representing the Church Commissioners what account is taken of the size of congregations in setting the contribution required from each parish to diocesan funds.

Mr. Michael Alison (Second Church Estates Commissioner, representing the Church Commissioners): It is not for the commissioners to set parish share or quota levels. Each individual diocese has its own method of calculating that and most take account, among other things, of the usual Sunday attendance figures, which are based on congregation size at times other than festivals or peak holidays.

Sir Michael Neubert: Is not it a matter of regret that church finances, which are already reeling from a fall in property values, will now have to cope with compensation running into millions of pounds to clergy who are leaving the Church in opposition to the ordination of women priests—an avoidable and infinitely divisive issue which, unlike the Bishop of Durham, who is taking retirement, and despite what he says, will not go away? Would not it reduce the number leaving and ease the financial burden on congregations if the safeguards proposed in the Act of Synod were incorporated in a supplementary Measure and given the force of law, rather than expecting traditionalist clergy to run the risk of another fit of political correctness and militant feminism at some point in the future?

Mr. Alison: I take note of what my hon. Friend has said. We very much hope that the alarmist figures of likely resignations will prove, in practice, to be gross overestimates and that the pastoral provisions announced already by the bishops of the Church of England will go a long way towards reassuring those who are in danger of resigning. I should point out to my hon. Friend that the net cost arising from resignations will depend on the extent to which resigning clergy are immediately replaced.

Mr. Frank Field: The hon. Member for Romford (Sir M. Neubert) asked whether the right hon. Gentleman would be in favour of the safeguard being enshrined in a supplementary Measure. If that Measure came before the House after women's ordination had taken effect, would he be in favour of that?

Mr. Alison: I would certainly be in favour of that, particularly if the hon. Gentleman felt happy with it. But we would have to look at it on its merits, and it would be difficult to provide the safeguards for which he and I are looking. Much would depend on appointment factors, which are often subject to secret voting, and one could never be certain that the aims that we seek were achievable in a statutory form.

Property Assets

Mr. John Marshall: To ask the right hon. Member for Selby, as representing the Church Commissioners what is the latest estimate of the property assets of the Church Commissioners.

Mr. Alison: The commissioners' property investments were valued at £901·2 million net at 31 December 1992.

Mr. Marshall: My right hon. Friend is possibly as surprised as I am that we have reached this question this afternoon. Has he considered the question of clergy housing? Is it desirable for clergy to live in a tied cottage for 40 years and then have to buy a home when they retire? Would not more women priests be attracted to the Church —many of us look forward to that—if they did not have to live in tied houses?

Mr. Alison: It would be very difficult to enable a clergyman to stay in the house from which he had been ministering to his parish, after he had resigned the incumbency of the parish. His successor would have to find somewhere to live, and there would be an increasing roll-on effect with the need to buy more and more property over the years. My hon. Friend will be aware that the Church has a very active and helpful rehousing provision

to enable clergy, on leaving a tied cottage, to find property for their retirement which is well subsidised by the Church Commissioners.

Oral Answers to Questions — LORD CHANCELLOR'S DEPARTMENT

Commonhold

Mr. Fishburn: To ask the Parliamentary Secretary, Lord Chancellor's Department what plans he has for introducing commonhold.

The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor): The Government intend to introduce legislation when parliamentary time allows.

Mr. Fishburn: Is not it absurd that condominiums and co-operatives, which are the standard way in which flat owners own their property throughout the English-speaking world and the Common Market, are not available in England? Would not commonhold put that right? Would not it be beneficial for this measure—which is supported by everyone who is interested in the proper forms of tenure for our great cities, from. the Duke of Westminster to the Labour Front Bench—to be introduced as soon as possible?

Mr. Taylor: No one has done more than my hon. Friend to advance that proposal and see it thus far, with the enfranchisement legislation shortly to receive Royal Assent. I share his sense of urgency about getting the condominium rules, or commonhold, on to the statute book, although he may feel that those of his constituents who have lived, in their view, under difficult reversion regimes have achieved a vital breakthrough in being able to acquire the freehold reversion. I agree, however, that the picture will not be complete until we get the commonhold legislation on to the statute book as well. There is great pressure on parliamentary time, and the commonhold legislation will have to compete with other legislation that the Government are minded to introduce.

Mr. Raynsford: Does not the Minister accept that, following the Government's shameful climbdown in the face of the interests of the landed estates and the Duke of Westminster, the leasehold enfranchisement measures in part I of the Leasehold Reform, Housing and Urban Development Bill will prove to be a sham to the large number of leaseholders who will not be able to take advantage of them? When will the Government show a sense of urgency about the need to reform leasehold and introduce the commonhold measures that have been promised for far too long?

Mr. Taylor: I have just answered the second part of the question. As for a climbdown, as the hon. Gentleman calls it, I am not aware of one. The measures introduced by the Department of the Environment, which are shortly to receive Royal Assent, have received a broad and proper welcome.

Legal Aid

Mr. Ian Bruce: To ask the Parliamentary Secretary, Lord Chancellor's Department what is his latest estimate of the amount that will be spent on legal aid in the current year; and what the figures were for (a) 1978–79, (b) 1990–91, (c) 1991–92 and (d) 1992–93.

Mr. John M. Taylor: It is estimated that net expenditure on legal aid will amount to £1·284 billion in the current financial year. Net expenditure on legal aid in 1978–79 and in the previous three years was as follows: for 1978–79, £86 million; for 1990–91, £682 million; for 1991–92, £906 million; and for 1992–93, £1·093 billion.

Mr. Bruce: The figures are clearly frightening because they reveal the speed at which the cost of legal aid is increasing. Has my hon. Friend thought to tackle the problem from the other direction, by reforming court procedures to cut the delays and waste caused by having many lawyers sitting around in court waiting for cases to be called and by frequent adjournments, thus also creating various costs?

Mr. Taylor: As I have been one of those lawyers who used to sit around, I have every sympathy with my hon. Friend's question. He may like to know that improvements to and the simplification of court procedures are a constant and urgent preoccupation of the Lord Chancellor's Department. Meanwhile, the royal commission will report tomorrow, and my hon. Friend will no doubt want to see the extent to which its proposals meet his anxieties.

Ms Eagle: What is the Minister's opinion of the fact that when Mr. Asil Nadir fled bail, he left behind a legal aid bill of £1 million which has to be footed by the British taxpayer, although Mr. Nadir is clearly not short of money? Will the Government consider examining the loopholes in the legal aid system to prevent such outrages happening again?

Mr. Taylor: It is extremely unusual to hear the Labour party worrying about the taxpayer—refreshing perhaps, but just a touch unusual. The Labour party's usual cry is for more and more legal aid.

Mr. David Shaw: What are the Department's views on the projections for growth in legal aid costs over the next few years? Is the Department worried about the fact that it is projected that the legal aid bill will exceed the Government support given to manufacturing industry?

Mr. Taylor: I do not have a brief to speak on industrial matters, but I can answer my hon. Friend's question about the amount by which legal aid is set to increase over the next three years. Very approximately, the figures are 10 per cent., 10 per cent. and 10 per cent. in each of the next three years, and the anticipated usage of legal aid is expected to rise from the participation of 3 million persons per annum to 4 million persons per annum during the review period.

Mrs. Roche: To ask the Parliamentary Secretary, Lord Chancellor's Department what assessment his Department has made of the effect of the recent restriction in eligibility to legal aid; how many representations he has received on this issue; and what proportion of them have indicated that this restriction is causing hardship.

Mr. John M. Taylor: We estimate that about 48 per cent. of households are now eligible for civil legal aid and about 21 per cent. for advice and assistance under the green form scheme. The Lord Chancellor and I have received a number of representations about various aspects of the changes to legal aid eligibility, a small proportion of which give examples of the effect of the changes.

Mrs. Roche: What would the Minister say to the seriously ill leukaemia patient who is not able to sue for medical negligence because of cuts in legal aid and who said that he could not gamble with the money that is meant for his children's food? What consideration has the Minister given to the Home Affairs Select Committee's recommendation that the cuts in eligibility should be restored?

Mr. Taylor: I remember that the hon. Lady raised the issue of the Home Affairs Select Committee's report with me during the debate on legal aid eligibility. I am at pains to tell her that the Lord Chancellor will shortly report, on the Government's behalf, on the Committee's report. I think that that will happen soon, and I do not want to anticipate it.

Sir Ivan Lawrence: Is my hon. Friend aware that two hours' consultation under the green form scheme for someone with an income of up to £60 a week will be free and that two hours' consultation for someone with an income of £62 a week will cost £100? In view of the all-party Home Affairs Select Committee's recommendation that the suspension of the green form scheme should be dispensed with, especially as it is to continue in Scotland —the Lord Chancellor told the Select Committee that people north of the border would be better off than people in the south—will my hon. Friend undertake to look again at the decision to do away with the green form scheme other than for those on income support?

Mr. Taylor: My hon. and learned Friend will be aware that the proposals were approved not long ago by a majority of 49 in this honourable House. They were subsequently referred to the High Court on judicial review, whereupon the Lord Chancellor's position was sustained in its entirety. However, it is not for me to anticipate future positions with regard to public resources and the many claims on them. We will continually and very closely monitor the effects in practice of the changes that we have made.

Judges

Mr. Cohen: To ask the Parliamentary Secretary, Lord Chancellor's Department what study has been made of the parental background, gender and race of judges; and what proposals he has for change.

Mr. John M. Taylor: The Lord Chancellor's policy is to appoint to judicial office, entirely on merit, those best qualified, regardless of gender, ethnic origin, political affiliation, religion or parental background. The Lord Chancellor has repeatedly made it clear that he particularly encourages applications for judicial appointment from women and ethnic minority practitioners.

Mr. Cohen: Are not working-class, black, Asian and women judges scarcer than praise for Arthur Scargill from


a Tory Government? Does not the hidebound and classbound composition of the judiciary contribute to its many mistakes? Are not many students—intelligent young men and women—saying that they now find it harder to obtain grants for courses in law studies? Is not it about time that the Government fast-streamed working and middle-class young men and women into the upper reaches of the legal profession?

Mr. Taylor: The only figures available on the socio-economic background of lawyers are contained in the results of a survey of student solicitors at the College of Law. In that survey, just over half the students responding described themselves as being from socioeconomic groups A and 13, 28 per cent. described themselves as C1, C2 or C3 and 20 per cent. failed to respond. That is encouraging evidence of a growing social spread among new entrants to the profession, but it is by no means a cause for complacency.

Mr. Hawkins: Does my hon. Friend agree that the significant increase in judicial appointments in recent years from ladies and members of ethnic minority communities is greatly to be welcomed? However, does he agree also that it is ludicrous for the Labour party to call for some kind of positive discrimination when what the British people need are the best judges? Is not it absolutely right for the Lord Chancellor to continue to insist that judges will be appointed only on merit and does not the positive discrimination suggested by the Labour party lead Labour into the ridicule and contempt of the British people?

Mr. Taylor: Yes, indeed. My hon. Friend may wish to know that the number of women in the judiciary is showing a steady increase. The trends at the lower levels are most important and they are the most particularly encouraging. There are now 50 female assistant recorders, compared with 35 some 15 months ago.

Mr. Boateng: Does the Minister recognise that, the merits of the current judiciary apart, there is a need for special training for judges hearing, trying and sentencing in cases involving sex offences? Does he recognise the extent to which the judiciary is brought into disrepute by the silly and inane remarks of some judges? What attempts will he make to ensure that the training for the judiciary in that important area is enhanced?

Mr. Taylor: There is no more urgent area of anxiety and progress in the Judicial Studies Board programme and curriculum than that identified by the hon. Gentleman. It has the highest priority of all.

Mr. Lidington: Would it not add to the diversity of the background of members of the bench if the Government were to ensure that rights of audience in the higher courts and eligibility to sit on the bench were opened up to all solicitors—not just solicitors in partnership but employed solicitors? Will my hon. Friend therefore override the objections of the barristers's trade union and introduce that necessary reform?

Mr. Taylor: The Lord Chancellor's advisory committee on legal education and conduct published its advice on this important matter on Friday. The committee's advice gives the green light to solicitors in private practice appearing as advocates in the higher courts. I think that the lights are at amber for employed solicitors. The Lord Chancellor will be considering those matters with the appointed judges.

Lawyers

Mr. Barry Jones: To ask the Parliamentary Secretary, Lord Chancellor's Department what information he has on the number of persons qualifying as (a) solicitors and (b) barristers in each of the last three years.

Mr. John M. Taylor: The information that the hon. Gentleman requires is collected by the independent professional bodies themselves. I understand from the Law Society that, in 1990, 3,389 solicitors were admitted to the roll, 4,614 were admitted in 1991 and 4,775 in 1992. I understand that, in 1989–90, 1,200 barristers were called, in 1990–91, 1,157; and in 1991–92, 1,340.

Mr. Jones: I thank the hon. Gentleman for the detail of his reply. Does he agree far more women barristers and solicitors are needed so that, before too long, we have a sufficient number of judges who are of the female sex? Does he accept that far too many of our judges are way off beam and far too insensitive when dealing with cases that relate to sex crimes? Will he admit that his Department —indeed, the Government—must do more so that we might have a better show? There is a need for him and his Department to do better.

Mr. Taylor: If the hon. Gentleman would re-read his question, he would see that there was no other way that I could answer it. He might take comfort from the fact that the most recent figures show that, in 1992, 49 per cent. of all those admitted to the roll as solicitors were women and that 13 per cent. were from ethnic minorities. Out of a total of 1,340 barristers called in 1991–92, 41 per cent. were women. The hon. Gentleman must regard that as encouraging.

Defence Estimates, 1993

The Secretary of State for Defence (Mr. Malcolm Rifkind): The House will be aware that every year the Government publish a Defence White Paper, which sets out their policy and plans for the future and describes the activities of the armed forces in the Minister of Defence. This year's White Paper, called "Defending our Future", is published today. We are also publishing the United Kingdom defence statistics for 1993, and a separate defence statistics bulletin showing expenditure on research and development.
I have taken the unusual step of announcing publication through a statement in the House because, although the White Paper includes the traditional information, I believe that the approach that we have taken in "Defending our Future" is a new departure, and that much of the material in it is particularly significant.
That applies in two respects. First, "Defending our Future" reports on the adjustments to the "Options for Change" force structure, taking into account recent changes in the international situation, and presents that force structure as an integrated whole.
Secondly, it then shows, in a way which has never been attempted before, how each of the elements of our armed forces can be matched to the various tasks which we require the armed forces to carry out. That matching of forces to tasks is crucial. The two must be in balance if we are to avoid wastefulness on the one hand and overstretch on the other. I believe that the analysis which we set out, which is an entirely new and ground-breaking approach, shows that that balance is being achieved.
The force levels of the armed forces are kept under constant review. We are regularly analysing the international situation, evaluating the threats which we face, and making sure that we have the right mix of forces to meet that threat. It is a continuous process. It is not something that we do every year, stopping our planning while we do it. Since last year's defence White Paper, we have continued that process of adjustment. Our conclusions are set out in detail in "Defending our Future". This afternoon I will describe the most important elements of what we are proposing.
The international situation continues to change, and in a number of very important respects the security of the United Kingdom has been enhanced in the past two years. In certain other areas there have been new demands on our armed forces. "Defending our Future" addresses both considerations.
I refer first to the improvements in our security and the implications for our force structure. Russia remains the largest European military power and it retains significant forces for its own defence; but it is also well disposed to the United Kingdom, its offensive capability has dramatically reduced, its equipment serviceability has deteriorated, and its defence industry is in decline. Since 1991, the Soviet Union has ceased to exist and Russian forces have now largely withdrawn from Ukraine, Belarus and the Baltic states as well as from eastern Europe. At the same time, we have made great progress in establishing mutual trust with our former enemies.
That means that a major external threat is even more unli8kely to re-emerge in the foreseeable future than seemed likely in 1991, and this makes it sensible for us to

make some reductions in the levels of relevant forces that were particularly aimed at countering the Soviet threat. Equally, the changed strategic situation has demanded that we confirm a series of enhancements to our capability in other areas. Let me begin with the reductions.
For the Royal Navy, the rapid decline in the size and operational activity of the former Soviet submarine fleet means that there is no longer the same need to sustain the current level of anti-submarine operations in the north Atlantic; nor is there the same need to patrol the Greenland-Iceland-United Kingdom gap.
We therefore plan to reduce the submarine fleet to 12 SSNs and to withdraw the Upholder class of four conventional submarines from service by 1995. We are examining the relative merits of their sale, lease, or storage. The reduced risk in the north Atlantic also means that the surface fleet can meet its tasks in peace and war, including our contribution to NATO, with a force of about 35 destroyers and frigates.
For the Army, we have decided that our requirement for indirect fire anti-armoured weapon can best be met through procurement of an air-launched weapon. Already, the United States and Germany have withdrawn from the MLRS 3 collaborative programme, and we will follow them at the end of the current phase.
For the Royal Air Force, the reduced threat of air attack to the United Kingdom means that a force of 100 Tornado F3 fighters will be fully capable of defending the United Kingdom and meeting our commitments to NATO's reaction forces. This is a reduction of 13 aircraft, and the force will be reorganised into six squadrons rather than seven. There will be no change in the number of Tornado GR1 aircraft.
We have also decided that, for similar reasons, there is no short-term requirement for a medium surface-to-air missile, but there is likely to be a longer term need and we are continuing our studies into those options. There is a clear operational justification for each of those reductions, which otherwise would not have been agreed.
I turn now to the other side of the picture—the enhancements to our current force structure that are appropriate to respond to new challenges and potential threats. The past 12 months have shown an increase in the number of operations, both in Europe and the wider world, in which our armed forces might be involved in conflict.
There is a need to ensure maximum flexibility and mobility for our armed forces in the modern world. In the White Paper we present measures that will improve our overall capability to respond to the changing situation, some of which have recently been announced to the House.
For the Royal Navy, we recently announced procurement of a helicopter carrier which will enter service later in the decade and which will significantly enhance our amphibious capability. No such dedicated carrier has been available to the Royal Navy since 1985. We are also proceeding with project definition of the class of ships to replace HMS Fearless and Intrepid.
For the Army, I recently announced an increase in the planned size of the infantry to take account of our new commitments, and our intention to retain two additional battalions and increase front-line strength by 5,000. We are also considering how best to equip the Army's six


Challenger I regiments, over and above the purchase of 127 Challenger 2 tanks which we have already announced. I will make a further announcement in due course.
I am able to announce today that we are placing an order worth some £75 million for over 400 new medium load carrier vehicles. That will enable us to deliver ammunition quickly to forward locations in support of our new AS90 self-propelled howitzers, and provides a good example of the practical steps we are taking to enhance the mobility and flexibility of our forces. We have also invited tenders for a future attack helicopter, which will substantially enhance the Army's anti-armour capability.
For the Royal Air Force, "Defending our Future" confirms plans to replace or refurbish part of the Hercules transport aircraft fleet. We also intend to procure a substantial number of additional support helicopters to increase the flexibility and mobility of our armed forces. The Eurofighter 2000 is now secure, and will be the cornerstone of the RAF capability in the future, and we have plans to upgrade the Tornado GR1's operational capability.
Those adjustments, taken together, represent a shift in the overall capability of our forces. We are reducing capability where the threat to the United Kingdom has itself been significantly reduced. We are gaining capability in those areas where we believe we will be required to act. Changes to particular capability areas need therefore to be seen in the context of the whole programme, and our security policy objective.
For example, our plans to reduce anti-submarine and air defence capabilities must be viewed alongside improvements in areas such as Army manpower, the new helicopter carrier, armour and anti-armour, and air transport helicopters—all key elements of the mobile, flexible and well equipped forces which we shall need for our future security needs. Choices always have to be made. It is my view, and that of the chiefs of staff, that we have made the right choices to enable us to face up to the challenges which confront us.
I turn now to the major innovation set out in "Defending our Future". I mentioned at the beginning of my statement the new analysis that we have undertaken of the way in which our armed forces carry out their commitments. "Defending our Future" includes unprecedented detail about the rationale for our current and planned force structures and activities.
During the cold war, defence planners dealt with a relatively simple equation, one side of which was the monolithic threat from the east. In the post-cold-war world, that certainty has vanished to be replaced by a broad spectrum of risk and uncertainty. The defence planner needs more sophisticated tools to ensure that the programme really is providing what such a fluid strategic setting demands.
We have therefore identified broad policy areas within each of the defence roles set out in last year's statement, and within each of those the specific military tasks, 50 in number, which the armed forces are required to undertake. We have then identified with some precision the force elements—for example, the number of infantry battalions or frigates or aircraft—required to meet each task.
All that is set out, in full, in the White Paper. It gives Parliament and the public an insight we have not had before into the purposes for which we use all the elements of our armed forces. It highlights the balance which currently exists between commitments and resources. It

also shows clearly how changes—for example, a decision to take on a new United Nations commitment or the approaching obsolescence of an item of equipment—may affect the detail of the programme. There are many valuable conclusions to be drawn from the analysis. Let me give a few general examples.
First, our analysis has also shown us how our defence needs are influenced by national commitments unique to the United Kingdom. Most of our European partners do not have commitments analogous to our responsibilities in Northern Ireland and to our dependent territories; nor, except for France, do our European allies maintain a national nuclear deterrent. The cost of those activities amounts to more than £3 billion a year. That has to be borne in mind when comparisons are made between levels of defence spending.
Secondly, the analysis also shows the value of NATO, and the benefits of sharing the financial burden of our collective security of the defence of Europe. If NATO disappeared and we had to insure on a purely national basis against major external threat, we would almost certainly have to spend a great deal more money than we currently do.
Thirdly, another valuable insight is the overlap between the types of forces needed for the defence of Europe and the types of forces needed to contribute to our wider security interests—through United Nations operations, for example. The kind of mobile, flexible, well equipped and trained forces, with true war-fighting capabilities, that we provide for our NATO commitments have proved equally suited to operations in the Gulf and in Bosnia—the Tornado and Sentry aircraft and the Warrior armoured personnel carrier, for example.
But the most significant overall conclusion is that the planned force structure is capable of meeting all the tasks we require of it. At the same time, we must, of course, ensure that its high quality of manpower, equipment and support is mantained; and I have touched on a number of the major items in our foward programme that will help us to do so. We must also watch carefully to ensure that we maintain the balance we have achieved between our commitments, our force levels, and the resources devoted to defence. Again the analysis will help us to do so.
I do not expect the House to comment in detail on this material today—but I hope, by publishing this analysis, that our defence debates will be even better informed than in the past.
"Defending Our Future" is a comprehensive account of the Government's defence policy. It rightly describes the tasks of the armed forces and the civil servants in the Ministry of Defence. I pay tribute to the outstanding way in which they carry out their duties. It also breaks major new ground in terms of open government. Never before have commentators on defence issues has such access to the defence planner's perspective. I hope that the House will understand and appreciate the seriousness of this endeavour, and I commend it to the House.

Dr. David Clark: I thank the Secretary of State for his "Statement on the Defence Estimates" and for accepting the argument, which the Labour party has advanced over the years, that more information on planning in the armed forces should be available to us. We do indeed appreciate this—especially the Secretary of State's acknowledgement of the role that our forces will


have to play under the aegis of the United Nations. Opposition Members take this matter very seriously. Indeed, it is included in the Labour party's constitution.
However, what the Secretary of State has announced is merely a small step, and is in no way a substitute for a full defence review, which would enable an assessment of the threats and the challenges to Britain's security to be made, so that our armed forces could be reshaped accordingly.
The Government's statement is long on presentation, but short on commitment; long on planning, but short on strategy. We have had fine words, but where's the beef? In reality, there will be increased demands on our armed forces, but they will have fewer tanks, fewer ships and fewer men and women. Nothing has changed: the overstretch will go on.
When will the Secretary of State shake off his indecision and take some decisions? When, for example, will he confirm that he has not yet made up his mind on a new nuclear bomb for the RAF? Does he not realise that he will have to cancel this eventually? Why cannot he do so now and save £3 billion?
Will the right hon. and learned Gentleman confirm also that he cannot make up his mind about the decision concerning Challenger 2 tanks? We need to know whether he intends to upgrade Challenger I or replace it with Challenger 2.
Why cannot the Secretary of State make up his mind about support helicopters? Is he not aware that our armed forces are desperately short of helicopters? Does he not recall that one of his predecessors, as long ago as 1987, announced the Government's intention to place an order for 25 EH101 support helicopters? After six years, is the Secretary of State incapable of making a decision?
What about our conventional submarines? How and why are the four Upholder class submarines to be disposed of, even though they cost us almost £1 billion to complete and are not yet in service?
These are questions to which we need answers. We need decisions. Today was decision day for the Secretary of State, but we have not had decisions.
The Secretary of State referred to the need for a non-proliferation treaty and for a comprehensive test ban. Will he now join Labour in welcoming President Clinton's wise decision, over the weekend, to extend the ban on nuclear testing? Why is the right hon. and learned Gentleman being so churlish? Does he not accept that this is a major step towards renewal of the non-proliferation treaty in 1995? Will not the Government welcome it?
Why does the Secretary of State treat the defence workers of Britain in such a cavalier and callous manner? Does he not appreciate that more than 100,000 of them have lost their jobs? The right hon. and learned Gentleman doe not seem to care about them. Why does he persist in refusing to establish a defence diversification agency, which could help in the transition from military to civilian jobs? These skills are too valuable for the nation to lose.
The Opposition accept that there is a case for reducing the amount that we spend on defence. With the end of the cold war, virtually every country in the world is doing so. But it must be done with management and planning, and the criteria must be those of security and defence, and not

simply demands from the Treasury, which are what the Government have adopted as their criteria. Strategy and savings can go hand in hand, but they must be balanced.
Today, we have had "Options for Change" mark 2. "Options for Change" mark I cut service manpower and today we have had cuts in equipment. When are we to expect mark 3, which will cut commitments?
The Secretary of State talks of "adjustments", but the adjustments that he has discussed today are no substitute for a full-scale defence review. The Conservatives have got Britain's defence into such a mess because they persist in that folly. It will remain in a mess until we have a full defence review.

Mr. Rifkind: The hon. Member for South Shields (Dr. Clark) asked me about Challenger tanks, support helicopters and submarines. He will appreciate the fact that, if Labour's policy of a £6 billion reduction in defence spending were implemented, there would be none of any of those for the armed forces, now or at any time in the future. The hon. Gentleman should reflect on that fact.
On Challenger tanks, the various rumours and reports about possible reductions in the number of armoured regiments or armoured reconnaissance regiments are incorrect. We have no proposals to make any reductions in the number of armoured regiments or armoured reconnaissance regiments. We are considering the best way to meet the modern requirements, in terms of their tanks, of those regiments.
We have reviewed the question of support helicopters and can confirm that there is an enhanced requirement for them to ensure mobility and flexibility for the Army's needs. I hope to make a fairly early announcement on precisely how we intend to implement that matter. We have said in the White Paper that we are considering options such as the sale, lease or storage of the Upholder submarines, and that will be taken forward.
The hon. Gentleman asked about nuclear tests in the light of President Clinton's announcement. Historically, this country tests less than any other nuclear power. We have carried out an average of one test a year, which is far fewer than France, the United States, Russia or China. Only with testing can one ensure the safety and reliability of nuclear weapons. If testing is not to continue, it will be necessary to develop computer modelling and simulation techniques but we cannot yet be certain that those methods will provide the information available from underground testing. Clearly, that needs further detailed consideration.
Finally, the hon. Gentleman came up with his usual call for a defence review, which masks the bareness, the nudity, of Labour party policy. Whenever the House asks the Labour party how much it thinks should be spent on defence, we are told that that will be considered by a defence review. When we ask the Labour party how many battalions, frigates or aircraft are required by the armed forces, we are told that that will be the subject of a defence review. When we ask what the commitments of the armed forces should be, we are told that that should be the responsibility of a defence review.
The hon. Gentleman's view and that of the Liberal party remind me of a remark that Voltaire once made—that the Opposition are like a eunuch, knowing what they want to do but not know how to do it.

Sir Nicholas Bonsor: I welcome the new format of the "Statement on the Defence Estimates",


which my right hon. and learned Friend the Secretary of State has produced today. I particularly welcome the new way in which the size and structure of the forces are linked to the Government's commitments, internationally and to defend our own country.
My right hon. and learned Friend will know that the Defence Select Committee feels that, in some aspects, our forces are overstretched at the present level of commitment, and we are looking for improvements to be made in specific areas. However, he is absolutely right to make that specific statement linking the two, and I look forward in future to ensuring that commitments do not outstretch resources.
In that context, I see no prospect of our being able to cut the commitments that the Government face in the short or long term to secure our country's future. That being so, it must follow that the Treasury can make no further cuts in resources to the funds made available to the Ministry of Defence. I hope that my right hon. and learned Friend will convey the feeling of myself, the Defence Select Committee and many of my colleagues to that effect.

Mr. Rifkind: I thank my hon. Friend for the welcome that he gave to the White Paper's general presentation. There has been some incorrect speculation in the press, and I can confirm that the resources available to the Ministry of Defence are, and continue to be, those announced in the public expenditure survey last year. Contrary to some suggestions in the press, no further reduction has been imposed on the Ministry of Defence.
It is right firmly to link resources, commitments and the other ways in which the armed forces carry out their requirements. Our commitments in some sectors have been reducing. Over the past year, there has been a reduction in our military presence in Cyprus, and we are in the process of reducing our military presence in Hong Kong. We have also indicated our intention to withdraw from Belize. There have been a number of such reductions. However, the overall link between resources and commitments must remain the test against which we judge any proposed changes in capabilities or assets for the armed forces.

Mr. Bruce George: I wish that the Chancellor had made this statement, as his fingerprints are all over the document which we have yet to see. The Secretary of State says that the White Paper breaks new ground, but that ground was broken in the 1920s and 1930s, when British forces were run down to a level that ultimately proved to be dangerous.
I hope that the Secretary of State's White Paper reflects the dangerous environment in which we live, and that he has provided adequate forces to meet all contingencies. If the Royal Navy found it difficult to meet its commitments with "about 50", how will it meet its commitments with about 30 frigates and destroyers? The right hon. and learned Gentleman will go down in history as the Secretary of State responsible for reducing the Royal Navy to the lowest number of capital ships—ships of the line—since 1689.

Mr. Rifkind: The hon. Gentleman's final comment is historically inaccurate. If he studies the records, he will discover that, in the 1820s, after the Napoleonic wars, ships of the line were reduced from 98 to, I think, 23—a figure far lower than the Royal Navy's current or expected strength.
The real test that must be applied involves the tasks expected of the Royal Navy. The hon. Gentleman will know from my earlier remarks that we believe it right to reduce the number of submarines and frigates because of the dramatic reduction in the threat previously posed by the Soviet naval forces. I do not think that the hon. Gentleman, with his knowledge of defence matters, would seriously question that there has been dramatic reduction of potential naval threat from Russia or the former Soviet Union. That is the operational basis on which the changes have been made.
If the hon. Gentleman wishes to know how the Royal Navy is to carry out its current commitments with the frigate/destroyer fleet of about 35, he has merely to read the White Paper, which says exactly how that will be done.

Mr. Archie Hamilton: Does my right hon. and learned Friend accept that the fact that the White Paper shows that our forces are aligned with our commitments is welcome? However, does he also accept that the scales are pretty finely balanced, which should make him reluctant to take on new commitments? My right hon. and learned Friend should constantly review where we might lose commitments, including Northern Ireland.

Mr. Rifkind: My right hon. Friend is right to say that there is not a lot of unused capacity in the armed forces. The White Paper shows that, as has always been the case, our armed forces carry out many tasks on behalf of Her Majesty's Government, and we do not have forces dedicated to unexpected contingencies or crises. All our forces which might be used in a crisis are used for other roles in peacetime. That is right and proper, and is the policy carried out by every other country. It is important that that point should be understood.

Mr. Menzies Campbell: The right hon. and learned Gentleman's literary reference is well taken, as there is more than a hint of Dr. Pangloss about himself.
The White Paper tells us two things. The first is that there is still no clear overall political judgment by the Government of what the United Kingdom's military role should be as a middle-ranking power. Secondly, if we are to have access to capability and to maintain our security, is not that most likely to be done through far greater military and political integration in NATO and the European Community as part of the integrated defence policy that the Maastricht treaty clearly contemplated?

Mr. Rifkind: On the hon. and learned Gentleman's opening comment, it is better to be candid with the House than to seek to avoid the consequences of our policy. That is what the hon. and learned Gentleman does, because he knows that the Liberal party called for a 50 per cent. reduction in our defence forces.

Mr. Menzies Campbell: Rubbish.

Mr. Rifkind: Yes, the hon. and learned Gentleman is right—it was a rubbish policy. That is why he is so embarrassed by it.
He also has the nerve to call for political and military integration within NATO. Where has the hon. and learned Gentleman been for the past 40 years? The United Kingdom defence forces could hardly be more integrated within NATO than they are at present.

Sir Geoffrey Johnson Smith: I congratulate my right hon. and learned Friend on producing a much improved defence White Paper. We all recognise that it is difficult to accept change and to match resources to changing commitments. However, many of us on this side of the House, while understanding the difficulty of accepting change, recognise that we are fully stretched. We do not want my right hon. and learned Friend to return to the House next year to say that, after making agreed changes to meet new commitments, or changes in commitments, he has to announce further cuts.

Mr. Rifkind: I acknowledge my hon. Friend's comments, and he is right to emphasise that commitments and resources must remain closely interlinked. We will continue to seek more value for money through improvements in efficiency and other such changes. However, there is inevitably a limit to that which can be achieved by that means. Where that can be achieved, it is well worth pursuing.

Mr. John McWilliam: The Secretary of State deserves our thanks at least for more information, but he receives some minus points for the way that it has been presented.
For example, the right hon. and learned Gentleman managed to include in the active fleet eight, not six, type 23 frigates, which could not be used on the Armilla patrol anyway. He has managed to include also Fearless as an assault ship, which could not put to sea tomorrow if we had a major war on our hands. From my brief reading of the White Paper, the Secretary of State seems to have included some questionable assets—but I assure him that I shall be studying it in much more detail.

Mr. Rifkind: It would be fairly absurd not to make any reference to ships currently in refit as assets available to the Royal Navy. Of course they are not available when they are in refit, but when one is determining total numbers, one takes into account the fact that refits are required for every ship at some time in its life.

Mr. Peter Viggers: Is my right hon. and learned Friend aware that his statement will come as a bitter disappointment to journalists who wrote about defence cuts before they knew the facts? In fact, there are no cuts in resources in the statement.
Does my right hon. and learned Friend agree that we need no lectures on defence from the Labour and Liberal Democrat parties, both of which are dedicated to dangerously damaging cuts? When allocating resources, will my right hon. and learned Friend remember always that 95 per cent. of our trade goes by sea, and that, however capable the Royal Navy's shipping units may be, we need sufficient units to be credible in defending our trading interests?

Mr. Rifkind: I agree. The Royal Navy will remain, after the United States navy, probably the most effective naval force in the world. It is a powerful force in terms not only of its ships and assets but of the naval skills and experience of those who man those ships. The Royal Navy performs a number of roles in the national interest, and I believe that it will continue to be able to do so with all the professional excellence that the nation has come to expect.

Mr. James Molyneaux: Given United Nations bungling, I compliment the Secretary of State on

the choice of title for his White Paper, "Defending our Future"—rather than the future of foreigners. May we assume that priority will be given to defending British interests and British citizens? It is to be welcomed that the Secretary of State has resisted any cuts in infantry strengths, particularly in the light of unwise statements made over the weekend by at least two ex-Ministers.

Mr. Rifkind: The defence of the United Kingdom and of its citizens must always be the first call upon Her Majesty's armed forces. Of course we look forward to the day when it will be possible to reduce the number of battalions in Northern Ireland in a responsible way. In judging when that is appropriate, we shall be guided by the important work that the armed forces are doing in Northern Ireland, and the importance of ensuring that the battle against terrorism is won.

Mr. Robert Hicks: Does my right hon. and learned Friend agree that there is probably greater uncertainty in the world today than at any time since 1945, and that, however good the planning of the link between resources and commitment might be, it might not always work out in practice? Is he aware of the increasing unease, especially in the Royal Navy, that that unfortunate set of circumstances might occur?

Mr. Rifkind: I accept the force of what my hon. Friend says. Considerations of the kind he mentions—the unpredictable nature of the post-cold-war world—require us to consider the need for armed forces that are more flexible and mobile and that can be deployed in circumstances that we cannot predict. Those enhancements have to be funded and, at a time of declining defence resources, it is sensible to identify the capabilities that are less necessary. Clearly, a potential Soviet naval threat in the north Atlantic has receded dramatically during the past few years, which entitles us to change the balance of our capabilities in the way that I have outlined.

Mr. Gerald Kaufman: The right hon. and learned Gentleman dodged the question put to him by my hon. Friend, the Member for South Shields (Dr. Clark) about nuclear testing, which the Government said 15 months ago was indispensable to the nation's security.
Does the right hon. and learned Gentleman agree that, now that President Clinton has banned British nuclear testing in Nevada, the pretence that Britain's nuclear capability is independent is exposed as a total sham? Will he also accept that, now that we have no Soviet enemy to aim nuclear weapons at, now that we have no American friend who will permit us to test those weapons and now that the French President and Prime Minister have called for a comprehensive international nuclear test ban treaty, it is about time that the Government took the initiative in the negotiation of such a treaty?

Mr. Rifkind: The United Kingdom's view on nuclear testing has not changed. We believed a year ago, and we believe today, that there are useful advantages in ensuring the safety and reliability of our nuclear weapons. If that is no longer possible, clearly the emphasis has to be on trying to identify whether simulation, computer modelling and other methods can provide comparable information. Time will tell whether that information can be provided in the same way, and we look forward to co-operating with other countries with that objective in mind.

Mr. John Biffen: I respect and welcome the skill with which my right hon. and learned Friend has undertaken this revision of our military capabilities, not least because it involves contesting with many long-standing interests. When "Defending our Future" and the expenditure that it postulates are fully effective, how will our military spending, as a percentage of our gross domestic product, compare with that of our political allies and economic rivals in the European Community?

Mr. Rifkind: When "Options for Change" is fully implemented. we expect British defence expenditure to be broadly the same as that of France and Germany, as it is today. As a percentage, it will be slighly higher than that of a number of other NATO countries, but much of that is to be explained by our commitment in Northern Ireland, our residual responsibilities for dependent territories and —along with France—our nuclear status. In terms of hard cash spent on defence, British, French and German defence expenditure are almost identical and are likdly to remain broadly the same.

Mr. Tam Dalyell: Footnote 5 on page 28 of "UK Defence Statistics", 1993 edition, states that there are 7,100 people in intelligence and investigation. Do we get value for money from them? How on earth could they have allowed a British Foreign Secretary to tell the House that the operation in relation to Kuwait was justified and proportionate, when we now learn that it would have done discredit to Abbott and Costello? These guys ran out of petrol and did not know where the university was where they were supposed to assassinate the former President of the United States. What has happened to British intelligence, and how could a senior member of the Government be so sure that the Americans were right?

Mr. Rifkind: If there was evidence available to the United States—and there was—that Iraqi intelligence was seeking to assassinate a former President of the United States, the American response, which was deliberately targeted on the headquarters of Iraqi intelligence, was appropriate.

Mr. David Martin: Can my right hon. and learned Friend confirm that the Royal Navy and Royal Marines manpower figures already announced are unchanged by today's statement? Will he continue to treat with contempt Liberal statements on defence matters of this kind, bearing in mind that party's conference policy, which has never been reversed, for a 50 per cent. cut in defence expenditure, with the horrible consequences that that would have for manpower and equipment levels?

Mr. Rifkind: It is correct that the likely redundancies affecting the Royal Navy and the Royal Air Force that were announced some time ago are unchanged by today's announcement, which we took into account when making those figures known. I understand that the Liberal party has never been asked to reverse the commitment to a 50 percent. cent. cut and the massive reduction in the size of the armed forces that would result from that policy.

Mr. Frank Cook: May I help the Secretary of State on matters nuclear? This year, his experts gave evidence to the Select Committee on Defence

that testing was unnecessary and that all the safety assessments could be done mathematically by computer modelling.
The Secretary of State makes a plea about the unique nature of our defence requirement, while at the same time saying that our defence provision is structually sound. That might be true coming from the brass hats, but it is not true coming from the people on the ground.
The Secretary of State cannot have it both ways. He cannot say that this nation is an international leader in strategic requirements and allow it to be the leader of the Rapid Reaction Corps and maintain a seat on the Security Council, while still allowing the Treasury to beat him about the head and drive him into the ground in this way. The Government cannot have it both way. When will they stand up for one or the other? They should either relinquish the leadership of the Rapid Reaction Corps and their seat on the Security Council or put the Treasury in its place.

Mr. Rifkind: The time to contemplate such an unpleasant conclusion would be when we were unable to meet our commitments. As "Defending our Future" clearly shows, the Rapid Reaction Corps and the United Kingdom's other commitments can be met. When the present draw-down process is complete in 1995, there will be a significant extra availability of military personnel to deal with any unexpected occurrences. It is at this precise moment, when a number of battalions or regiments are amalgamating, that we have restricted availability of forces for any overseas commitments. That situation will ease over the next 18 months.

Rev. Ian Paisley: Is the right hon. and learned Gentleman aware that a statement by the former Minister of State for the Armed Forces that the cuts could lead to a cut in the commitment to troops in Northern Ireland received wide coverage in the Province?
Will the Minister note that, when the former Minister of State, his right hon. Friend the Member for Epsom and Ewell (Mr. Hamilton), mentioned Northern Ireland, he sidestepped any comment on that matter? Will the Minister rectify that by assuring the people of Northern Ireland that, although, under the policy of his right hon. Friend the Member for Epsom and Ewell, the Ulster Defence Regiment and part-time soldiers met their demise, there will be no cuts in the troop commitment to Northern Ireland?

Mr. Rifkind: The men of the former Ulster Defence Regiment are now carrying out an extremely valuable and welcome role as proud members of the new Royal Irish Regiment. I hope that the hon. Gentleman will welcome the new way in which they have been further integrated with the armed forces of the United Kingdom.
The precise level of our military presence in Northern Ireland cannot be static because, of course, it will change —sometimes it will go up, and sometimes it will go down. I look forward to the day when security will enable it to be substantially reduced, because that would be a clear mark of success in the battle against terrorism. I assure the hon. Gentleman that it would be reduced only if the security circumstances in our view were to justify such a course of action.

Mr. John Hutton: While welcoming the greater transparency and openness in the


White Paper, which will benefit the discussion of such issues in the future, I must express reservations about the statement on the Royal Navy and the future of Britain's few remaining warship yards.
Can the Secretary of State confirm that a new class of ships is designed to replace Fearless and Intrepid, and that it is not the Government's intention to replace those ships with one assault ship? Can he confirm that there will be no slippage in orders for the new class of submarines, the batch 2 Trafalgars?
When does he expect the next round of type 23 frigate orders to be placed? Will his right hon. and learned Friend the Chancellor of the Exchequer come to the House in November with yet a further round of defence cuts that he will have to explain?

Mr. Rifkind: Coming as he does from Barrow-in-Furness, I thought that the hon. Gentleman might have at least preceded his comments by welcoming the helicopter carrier, and the benefit to employment that will result in his part of the country. We have concluded that it is right to take forward the project definition for the replacement of Fearless and Intrepid and, at this stage, we envisage two ships to replace them. Announcements about other procurement matters will be made in due course when we have something new to say. There are no changes other than those that I have announced.

Mr. Ian Taylor: My right hon. and learned Friend's contribution to the proper discussion of defence priorities in this document is to be warmly welcomed, certainly on the Conservative Benches, where the only constructive discussion will take place.
Will he look closely at the shifting foreign policy objectives? There are many current concerns about the former Soviet Union, such as the potential destabilisation that may be caused by the movement of Russians outside Russia. There is also the problem of nuclear proliferation, especially in the middle east. We in Britain need to know that we have the resources available to meet those foreign policy commitments as and when they arise.

Mr. Rifkind: I agree with my hon. Friend. The situation in Russia is, at best, uncertain and there could be either beneficial or worrying developments. No one can predict how events may turn out. Russia remains a nuclear super-power and, even after it has fulfilled all its obligations under the START treaty, in 10 years it will still have more than 3,000 strategic nuclear warheads.
For reasons such as those, we have to maintain a strong defence, and NATO must continue to be the fundamental bedrock of our defence policy. That has been the guiding factor that has determined the sort of defence capability that we must continue to have long into the 1990s.

Mrs. Margaret Ewing: In the context of the reduction of RAF Tornado squadrons from seven to six, will the Secretary of State confirm that there will be no implications for the development of RAF Lossiemouth as a key base in the deployment of and training in the use of those aircraft? When will he be able to announce exactly the further plans for the operational capability of the GR1s?

Mr. Rifkind: The particular squadron that will be disbanded as a result of today's announcement will be the

No. 23 Squadron at RAF Leeming. Other matters will be reported to the House when we can give specific information.

Sir Nicholas Fairbairn: rose—

Hon. Members: Hear, hear.

Sir Nicholas Fairbairn: I am obliged to hon. Members on both sides of the House.
May I congratulate my right hon. and learned Friend on his terse and trenchant statement, and suggest that, for the country's benefit—as the hon. Member for Upminster (Sir N. Bonsor) said—that is as far as we can go? May I suggest that he abandons the "about" theory next year? We are to have "about" 40 destroyers or frigates, which I am told means between 35 and 45—and presumably means 35. Thereafter, the figure will be 35, which I am told means between 30 and 45. If everything can be numbered correctly, why are destroyers and frigates, which will apparently be repaired and refitted at Rosyth, given such a vague assessment?

Mr. Rifkind: I echo the House's welcome to my hon. and learned Friend on his return to the House after his recent illness. We are delighted to see him in the Chamber.
I appreciate my hon. and learned Friend's concern about the number of frigates and destroyers. He will be pleased to know that, contrary to some press speculation, the 18 major warships which I said recently would be refitted at Rosyth are in no way affected by today's statement. We were, of course, aware of the contents of the White Paper when I reported to the House on the allocated programme that would go to Rosyth. In the consultation document, which we hope to publish later this week, the figure of 18 major warships will be confirmed.

Mr. Andrew F. Bennett: In view of the commitment of the Secretary of State and of the Government to a new non-proliferation treaty, how can we continue to try to develop a new free-fall nuclear bomb and the tactical air-to-surface missile system? Would it not be logical to abandon that attempt and to save money, which could then be used necessarily to increase our conventional weapons and conventional defence systems?

Mr. Rifkind: The whole question of the future of our sub-strategic nuclear capability is currently under consideration. I hope to be able to report to the House fairly soon on that matter. I do not want to add anything at present.

Mr. Winston Churchill: However skilfully my right hon. and learned Friend may have dressed up his announcement today, is he aware that he cannot conceal the fact that it constitutes part of the relentless rundown in the capability of our armed forces from an already tiny base? Is he aware that it is especially a matter for regret that he has not been able to reprieve any more of the overstretched infantry battalions which still face cuts?
My right hon. and learned Friend has announced today that there will be further reductions in the front-line strength of the Royal Air Force. As my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) has just mentioned, the reduction from 50 destroyers and frigates a decade ago to about 35 is a matter for deep concern. Looking to the overall capability of our armed forces, is my right hon. and learned Friend aware


that we shall no longer be able to fulfil our capabilities, as we have in the past, if we ever have to fight a significant conventional war?

Mr. Rifkind: I cannot agree with my hon. Friend's conclusion. We believe that we would be able to defend these shores against the threat to which my hon. Friend refers. He must reflect on what changes he believes are justified in the light of the end of the cold war, the collapse of the Soviet Union, the removal of the Soviet naval threat from the Atlantic and the removal of any likelihood in the foreseeable future of a direct attack on the United Kingdom.
One cannot, of course, exclude the possibility that those threats, which have largely disappeared, might re-emerge at some date. However, they could not re-emerge overnight, but only over a considerable period. If there was any evidence that such a new threat was beginning to re-emerge, there would be a bounden duty on this Government, as there would be on all NATO Governments, to revise our defence capabilities.
In all honesty, we cannot argue that it necessary to maintain in the vastly different circumstances of the 1990s a balance of capabilities that was designed for the cold war. There is a need for greater flexibility and mobility, and that is why part of our planned enhancements which have been envisaged in recent years are to continue and are to be made available to our armed forces in the way that I have described.

Mr. Greville Janner: How many people will be made redundant by the armed forces as a result of the previous announcements by the Secretary of State and of his announcement today? As the figure will run into thousands, and as those people will be made redundant when millions of people are already looking for jobs, will the Secretary of State confirm that he has consulted the Secretary of State for Employment about the results of such redundancies? Have his officials talked and listened to Department of Employment officials about the employment results of his policy?

Mr. Rifkind: Redundancies in the Navy and the Air Force were announced in recent months. Today's statement has done nothing to change the figures as, obviously, we took those matters into account. I announced a proposed size for the Army of 119,000 some months ago and a large part of the draw-down has been completed. There will be a need for a third phase of redundancies on the basis of the orginal proposals that were announced some time ago, but that will not be changed by the White Paper.

Mr. Michael Colvin: No one could accuse my right hon. and learned Friend of lacking presentational skills. He made—as any good lawyer would —the best of a brief which, at first sight, seems to be inadequate and driven more by the Treasury than by defence considerations.
Will he address the question of the mobility of our armed forces which has been raised by some hon.

Members? He has not answered the question about support helicopters, or those about heavy lift air transport of a tactical and strategic nature. Does he agree that it is important that, if we are to fulfil our obligations to the United Nations peacekeeping and peacemaking efforts, we must be able to get men and equipment to the places where they are needed as quickly as possible?

Mr. Rifkind: I agree unreservedly with my hon. Friend. We have carried out a new assessment in recent months as to the likely need for support helicopters. That assessment has suggested that enhanced financial provision—greater than had been anticipated previously—is needed to ensure that support helicopter facilities will be available. That provision is built into our assumptions.
We are working on the precise identification of the type of helicopter that would be required, and we hope to come to an early conclusion. My hon. Friend knows that various options have been discussed recently. The need for a proper enhancement of support helicopters is accepted unreservedly.

Mr. David Young: The Secretary of State has poured scorn on the suggestion of a defence review. May I ask him for a commitment that he will not allow British forces to go into any future situation where those troops would be overstretched, under-resourced and underfunded until there has been a defence review?
In view of the redundancies that are implicit in the statement, what discussions are the Secretary of State and his Department having with the DTI and the Department of Employment to ensure that areas that are dependent on defence contracts have other industries brought in, and ensure that the skill of men and women in the defence industries is not lost when they are thrown on the scrap heap?

Mr. Rifkind: The signs are rather encouraging. Over 70 per cent. of those who were made redundant from the Army during the past year have now found employment. The fact that that has been possible during a severe economic recession is a useful indicator of how valuable their experience has been. The hon. Gentleman should welcome that.

Several hon. Members: rose—

Madam Speaker: Order. We must now move on.

STATUTORY INSTRUMENTS, &c

Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &amp;c.).

MERCHANT SHIPPING

That the Merchant Shipping (Local Passenger Vessels) (Masters' Licences and Hours, Manning and Training) Regulations 1993 (S.I., 1993, No. 1213) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Michael Brown.]

Question agreed to.

Orders of the Day — OPPOSITION DAY

[16TH ALLOTTED DAY]

Orders of the Day — Pit Closures

[Relevant document: The First Report of the Trade and Industry Committee of Session 1992–93 on British Energy Policy and the Market for Coal (HC 237), together with Memoranda of Evidence (HC 703).]

Madam Speaker: I have selected the amendment in the name of the Prime Minister. I shall limit speeches to 10 minutes between the hours of 7 pm and 9 pm.

Mr. Harry Barnes: On a point of order, Madam Speaker. The motion that we are to debate ends with a reference to measures that would ensure
a fair opportunity for coal to compete for a wider market.
No. 36 in the Remaining Orders of the Day and Notices of Motions—last, but not least—is the Energy (Fair Competition) Bill, which would introduce measures such as those referred to in the motion. In those circumstances, is it not right that we should be given an opportunity to consider that measure following today's debate? The Bill could do what the Secretary of State has not done to save the coal industry in this country.

Madam Speaker: The hon. Gentleman will be aware that that is not a point of order for me. He is a good publicist, though: I note that it was his own Private Member's Bill to which he referred.

Mr. Robin Cook: I beg to move,
That this House recalls that Her Majesty's Government encouraged the belief that the proposals in the White Paper, `The Prospects for Coal' would reprieve 12 pits and widen the market for their coal by providing a subsidy for their output; notes that within three months of its publication two of those pits have already closed and no extra contracts have been secured for the coal of the other ten pits, which therefore remain at risk; records its concern at the damage from the continuing closure of Britain's coal mines to the coalfield communities, the mining equipment industry, and the long-term security of energy reserves; and demands that Her Majesty's Government now acts to secure the future of the remaining pits and adopts the recommendations of the Trade and Industry Select Committee in its Report, 'British Energy Policy', which would ensure a fair opportunity for coal to compete for a wider market.
Three months ago, the House debated the White Paper on coal. The press reports on that White Paper were all quite clear about its bottom line—that 12 pits had been saved. Most of them put that bottom line in their headlines. The Daily Telegraph announced:
12 pits reprieved by Heseltine".
The Financial Times carried the headline:
Government to save 12 pits".
The Independent—marginally more optimistic than the rest —said:
13 pits have hope of survival".
In Today, we read:
£500 million bill for taxpayers to reprieve a dozen pits".
The Daily Express—the official organ of the state, which saves us from speculating what Conservative central office is saying by faithfully reprinting every word—announced:

12 pits and 7,000 jobs are saved".
Those half-dozen newspapers did not all reach the same conclusion by accident. They were all heavily briefed, lobbied and guided to the same conclusion—that 12 pits would be saved. But the educational effort that was mounted to get the message across to the press was as nothing compared with the one-to-one tutorials set up to convince Conservative Back Benchers—and many of them believed what they were told.
I see that the hon. Member for Davyhulme (Mr. Churchill) has temporarily absented himself from the Chamber. He was quoted by the Press Association a fortnight ago as saying that
Had he known then what he knew now he would have voted against the White Paper rather than merely abstaining.
I hope that the Patronage Secretary's representative will convey to the missing Member our hope that we are tonight giving him a second chance to redeem himself. We can assure the hon. Gentleman that there will be more rejoicing tonight in our Division Lobby over the one prodigal who returns to it than over the 295 who got it right last March.
At least the hon. Member for Davyhulme abstained. The hon. Member for Rochford (Dr. Clark), who I am pleased to see is with us, voted with the Government. During the March debate, the hon. Gentleman said:
While we hoped that we might have been able to save more pits than the 12 … which we will save, at least we have 12".—[Official Report, 29 March 1993; Vol. 222, c. 58.]
I am sorry to say to the hon. Gentleman that we are now 10. Only three months later, we have lost two of those pits. At Rufford, the decision has been taken to close the pit, which will cease production when the current face is exhausted—probably in a couple of months' time.
The hon. Member for Wells (Mr. Heathcoat-Amory), the Minister of State, Foreign and Commonwealth Office, who was then Minister responsible for coal, visited Rufford in February last year. This is what he said to the local paper:
Rufford is a fine example of how a loss-making pit can turn round to become a remarkable success.
Barely a month before a general election, in a marginal Tory constituency, Rufford was a remarkable success. Now, barely a year into this discredited Tory Government's term of office, Rufford is an expendable failure.
At Markham, production has already ceased. As it happens, I have been down to Markham. Only six months ago, when I visited Markham, there was machinery still in service. It was new machinery—machinery that they were still stripping down to install underground. It was modern machinery—machinery that had helped to make that pit highly efficient and to double its productivity in eight years. It was expensive machinery—machinery that is now among the millions of pounds' worth of machinery that is being left underground in Britain to buckle under pressure and be buried under roof faults.
I hope that, in his reply, the Minister will spare the miners at that pit and at Rufford the humbug that it is they who choose to close the pit by accepting redundancy. In those cases, they had no choice. Those at both pits were told that they could stay open until next year, when the coal contract drops by 10 million tonnes, or they could vote to close this year. The difference was that, if they voted to close this year, they would each get an extra £10,000 on top of their redundancy. We have all contested


elections; that is how we got here. I doubt whether any of us would care to contest an election in which the voters for our opponent qualified for a £10,000 bonus.
I fully understand why those miners voted for extra redundancy money. The only thing about which they were being consulted was whether their pit would close this year or next. It is a grotesque travesty of the language to say that any of them have taken voluntary redundancy. Let us at least give them the dignity of recognising 'what the Government forced on them—compulsory redundancy in all but name.

Mr. Peter Thurnham: Will the hon. Gentleman make it clear how he intends to pay to keep pits open? Does he intend to keep all 31 pits open? Does he recollect that previous Labour Governments closed 277 pits without any of the generous redundancy payments that this Government have offered?

Mr. Cook: That Labour Government did not make one miner compulsorily redundant. That Labour Government saw an increase in the amount of coal going into electricity generation. I do not take any particular kudos for that Labour Government, as it was like every Government since the war except this one. This is the first Government to see a reduction in the amount of coal for electricity generation. That is why we have a crisis in our coal industry. The hon. Gentleman helpfully brings me on to the reason for the closure of those pits, and the reason why the other 10 are still at risk. It has nothing to do with miners wanting to go.
Neither the White Paper nor the three months since it was published have produced a contract for one extra bag of coal from those pits. That is why they are closing. It will not do for Ministers to say that it is nothing to do with them, that it is not their fault, it is the fault of British Coal for not selling the coal, or the fault of the generators for not buying the coal, or, as the Minister appeared to suggest this morning, the fault of Michael Fish because it has been too warm for the past three months to sell the coal.
It will not do, because it was their idea. It was they who came up with the lifeline of a subsidy to find a bigger market. It was they who let the press believe that that would save 12 pits. Now that it is not working, it is they who, for just once in their ministerial careers, must accept responsibility for it not working. We warned them that it would not work. It would not work because the problem for coal is not its price. One cannot sell coal at any price in a market that has been specially rigged to keep it out.

The Minister for Energy (Mr. Tim Eggar): indicated dissent.

Mr. Cook: The Minister may shake his head, but I address my point to him. If there is one thing for which I am grateful to him and his colleagues in the Cabinet, it is that in the past three months they have proved our case about the rigged market. They set out to test the market. The result of that test is already in: two pits have failed it. The result of that test confirms that we are dealing with a rigged market. Let us review the evidence.
Since March, British Coal has relied on the subsidy to offer extra coal for sale to generators at a sharply reduced price. The price is supposed to be a commercial secret, but since no one is buying it, let us give it some more advertising space. The price at which it is offering coal is

93p per gigajoule. That is 40 per cent. below the base price in the contract. At that price, generators could produce electricity at a penny-ha'penny per kilowatt hour. That is cheaper than they can produce electricity from the new gas-fired stations, at tuppence per kilowatt hour.
It is cheaper than they can buy electricity from France at threepence ha'penny per kilowatt hour. It is cheaper than they can buy electricity from nuclear power stations, at almost 4p per kWh hour. If ever more proof were needed that we are dealing with a market rigged against coal, what better proof could there be than that the generators will not buy it even when it would give them cheaper electricity?
The largest consumer of electricity in Britain is ICI. It is not a dangerous, leftist front, even if it makes donations to the Tory party. Its power services manager has prepared a comparison which shows how ICI has been disadvantaged by the generators' refusal to buy that cheap, subsidised coal. I shall read it in full, as it is worth sharing with the House:
Utilising internationally priced coal … Fiddler's Ferry power-station, 5 miles from ICI in Runcorn,
is capable of generating electricity
in the range of £10–15/vcMWh.
For a high proportion of the time, this power station"—
a coal-fired power station—
and others like it are underloaded, yet new gas-fired power-stations which require an income of £25–30/MWh are being built and prosper within the market. Generation costs are therefore higher than necessary.
He ends by saying:
We invite a rationalisation of this economic behaviour.
The question that the Secretary of State must answer is this: how can he rationalise that perverse outcome? While he is at it, can he explain why the Government are still approving more gas power stations? Last month, his colleagues at the Department of Trade and Industry approved a new gas power station at King's Lynn. It is an interesting case, because the King's Lynn power station will be wholly owned by the local electricity company. All profits from its sales will go to Eastern Electricity.
I invite the House to speculate on what will happen once that power station, approved by this Government, is up and running. Will Eastern Electricity play the market? Will it whoop with delight when it discovers that a coal-fired power station could give its consumers cheaper electricity than the one that it has just built? If Ministers are so wet behind the ears as to believe that that will happen, they should have taken not the money from Octav Botnar but lessons in how markets work in the real world.
Eastern Electricity will fix its purchasing so that it will take all the output that can be produced by that station, and to ensure that that is what will happen it will do what every other electricity company has done : it will give the new power station a 15-year contract, which guarantees that it will take all the electricity that the power station can produce.

Mr. George Stevenson: It is called competition.

Mr. Cook: My hon. Friend takes my punchline. I have marked him down and will bear it in mind against him.
The Government tell us that this is widening competition. It is not widening competition but closing down competition. Nobody else can compete, whatever their price, for the share of the market that those contracts


guarantee the new gas-powered stations. In the next three years, one third of the entire electricity market will be sewn up in these sweetheart deals.

Mr. Rod Richards: In view of what the hon. Gentleman said about Fiddler's Ferry power station, will he tell the House whether he and his party are for or against the construction of the Connah's Quay power station?

Mr. Cook: I remind the hon. Gentleman it is fresh in my mind because I re-read my speech last night—that he made the same request in my last speech. I have to give him the same answer, and it is straightforward: Labour sees no objection whatsoever to the Connah's Quay project, because it is proposed to use sour gas, which cannot be used to heat homes direct and cannot be used in ovens. Our objection is to sweet gas—a premium fuel—being turned into baseload electricity with the loss of half its calorific value. That is not only bad for coal mines but is a daft energy strategy. I hope that the hon. Member for Clwyd North, West (Mr. Richards) is capable of remembering that for the time when we debate coal again in the autumn.
That is why the Select Committee recommended that we should stop handing out licences to every new gas station and that we look at downrating electricity stations to meet peak demand, not running them flat out to meet baseload. The Government totally ignored those recommendations.
There is one other aspect of the rigged market on which I want to bring the House up to date—the interconnector with France. In the White Paper, Ministers welcome changes in the contract with France, which from April
will ensure that exports will occur"—
that is to say, exports of electricity from Britain to France. It is paragraph 7.106 if the Minister wants to look it up.
I checked last week with the National Grid Company on what exports have occurred since that statement that the changes will ensure that exports will occur. In April, Britain exported to France zero electricity. In May, Britain exported to France zero electricity. In June, Britain exported to France zero electricity. There was a change —I would not wish to deny to the House that since the White Paper there has been some change in our relationship with the French interconnector. The change was that, in each of those months, imports of French electricity were up on the same month one year ago.
I remind the House that we are paying more for the electricity from the French interconnector than we would for electricity from coal—from the pits that we are shutting down. I will happily give way to any Conservative Member who is capable of believing for one minute that France would dream of importing electricity from a foreign source at a higher price and at a cost of shutting 31 French pits. I am not surprised that there are no takers, because we all know that there is not the remotest prospect of the French paying over the odds for an import that will damage their domestic industry, which is precisely what we are doing.

Dr. Keith Hampson: As in so many areas, the hon. Gentleman does not seem to have understood the Select Committee report, if he has read it. The report clearly states that most of our electricity

companies purchase French electricity because it is cheaper for the company. Although the distortions of the nuclear levy might ultimately make it more expensive, for the companies it is cheaper.
Is he saying that companies should deliberately buy more expensive electricity rather than take what is cheap and on offer? Does he accept that some electricity companies, such as Yorkshire, are buying less energy from the interconnected? Indeed, Yorkshire is not buying any French electricity this year, compared with last.

Mr. Cook: The net effect is an increase. In one sense, I welcome the hon. Gentleman's intervention, because it takes me on to my next point. He is absolutely right. The reason why the electricity companies find it profitable to pay more to import French electricity is because—

Dr. Hampson: They pay less but the nonsense of the levy makes it ultimately more costly.

Mr. Cook: They claim it back. We are daft enough to pay them the nuclear subsidy on all electricity from France. Since March, the Government have not paid a penny in the subsidy that they promised to British coal mines, but they have paid millions of pounds to subsidise electricity imports from France. I remind the hon. Gentleman, who seems to have forgotten it, that recommendation (7) of his own Select Committee was:
Electricity supplied from France should cease to be non-leviable. EdF's ability to negotiate contracts to supply-baseload … should be made conditional on UK generators having non-discriminatory access
through the French network. Again, those recommendations were ignored by Ministers.

Dr. Hampson: indicated dissent.

Mr. Cook: That is what the hon. Member recommended to his Government.
There is a contradiction here. Ministers have consistently rejected all the recommendations of the Select Committee to challenge the rigged market. Ministers tell us that they accepted the recommendation of the Select Committee. What they mean—I have listened carefully to what they say—is that they accepted the recommendation of a subsidy. But I again have to say that that was not what the Select Committee recommended.
Before the Secretary of State tries to pull that one on the House, let us be quite clear what the Select Committee recommended. Yes, it recommended a subsidy of 16 million tonnes for electricity generation, but it did so with the parallel recommendation that there should be a requirement on the generators in return to contract for 21 million tonnes of additional coal. What the Government did was to offer generators the subsidy without making them give a commitment to buy any extra coal.
Instead of buying that extra coal, the generators are running down coal stocks at power stations. I have two observations to make about those coal stocks. First, I would have more sympathy with the generators' claim that they have more coal in stock than they need if they had not been so busy importing coal for the past five years. According to their own calculations and their own logic, those imports must now be a mistake. If they do not need all those coal stocks at the power stations, they did not need all the imports that have added to our balance of trade deficit, thus increasing pressure on manufacturing industry to achieve more exports to pay for the coal that they did not need.
My second observation is addressed more to the Government than to the generators. In the three months since we last debated the issue, Lord Ridley has passed on, but I debated against him often enough to know that he would not want his role to go without recognition just because he is not here to listen. It was Lord Ridley, after all, who–15 years ago—wrote the strategy that the Government have followed so faithfully. He composed a paper before the Government came to power, explaining how a Conservative Government could run down the coal industry and weaken its power. I looked at it again this morning, and noted that its first recommendation was for the Conservative Government to
build up maximum coal stocks, particularly at the power stations".
That is why, throughout the Government's term of office, we have had large coal stocks. The aim was to prevent miners from stopping work; now there is a danger that those same stocks will be used to put them out of work for good. That is why the Select Committee recommended that the generators should be required to hold not less than 20 million tonnes of coal—double the level at which they are apparently aiming.
The White Paper, for once, did not ignore that recommendation. In paragraph 13.23, Ministers committed themselves to having talks with the generators, about stocks
 "as a matter of urgency".
May I ask the Secretary of State what happened to those stocks? What is his definition of urgency? Why are the generators behaving as though the White Paper had said nothing about the level of stocks? When the generators have run down the stocks, there will be no point in turning around and asking Britain's coal mines to increase output; by that time the mines will be closed. They will have been filled in and flooded—and not just the 12 that the White Paper claimed to have saved.
The House must now face up to the gravity of the crisis in the coal industry. Between them, the pits not included among the 12 are already producing more than 30 million tonnes. That is all that the generators will buy from next year onwards. On present markets, not only will all those 12 pits go by March; so will some of the others that have yet to figure on any closure list. That will be a tragedy for the surrounding communities—communities that were built because a pit was there; communities that will have no work when the pit is gone. It will also be a tragedy for the nation, because with those pits will go our access to our coal reserves.
Silverdale has figured in the press as one of the pits that may be next for closure. The shaft and tunnels at Silverdale give access to 30 years' supply of coal. No one else in the world would be filling in shafts that give access to such an immense national resource.
The other week, the Chancellor of the Exchequer shared with us his insight into the economics of the coal industry, observing:
Coal is a rather old-fashioned way of generatiing electricity.
I concede that it is rather old-fashioned in the Chancellor's constituency, where his Government have just closed the last pit; but if it is so old-fashioned, why have the last two dozen power stations ordered in the United States been coal-fired? Why does the United States expect coal consumption to rise by one fifth in the next decade? It should not be difficult for Conservative Members to obtain

the United States coal figures: they need only ask that notable donor to the Tory party, Lord Hanson, who owns most of the pits. He may not take kindly to the news that the party into which he has poured so much money is describing his operations in America as old-fashioned.
Not only have we the largest coal reserves in Europe; as Conservative Members want to talk about the cost of production, let me tell them that we have the most efficient coal mines in Europe. We are busy closing them down, while other Governments are working hard to keep open the least efficient pits in Europe. The case for saving Britain's pits is not based on nostalgia for the past; the case for saving our coal industry is based on their success in the present.

Mr. Graham Riddick: What percentage of the coal that will be burnt in the new coal-fired power stations in America has come from opencast mines?

Mr. Cook: A number of mines in America are not as deep as ours, but they are not opencast mines by any stretch of the imagination. [Interruption.] Pearson and Hanson, which owns them, runs deep mines, but they are not as deep as ours. Pearson is a wholly owned subsidiary of Hanson. [Interruption.] I hear an hon. Member ask where else in Europe Governments are seeking to keep pits open. Germany is now providing its coal industry with three times the amount that our Government have contributed to the British industry.
America has opencast and deep mines, as has Britain. It is for that very reason that the majority have been closed. If the hon. Member for Colne Valley wishes to make a case on behalf of opencast, he must consider the point that I have been making throughout my speech about the market for coal. If the current position continues, opencast as well as deep mining in Britain will be in trouble.

Mr. William Cash: The hon. Gentleman referred to Germany. Does he concede that, according to the most recent figures available to us, in 1991 the German coal industry received £9 billion—pounds, not ecu—of authorised state aid through the European Commission? Does he accept that we should investigate the imbalance vis-a-vis the British coal industry?

Mr. Cook: I congratulate the hon. Gentleman on getting in a pro-coal and an anti-European point simultaneously. I agree with the thrust of his remarks, which is essentially correct. If we take the European perspective—although I suspect that the hon. Gentleman may not wish to do so—it is insane that in Europe we are closing down the most efficient pits, which produce the cheapest coal, while other Governments are providing substantial subsidies. The German Government, supported by the Common Market, are doing so to keep open pits that produce coal at three times the price at which it is produced in Britain.

Dr. Hampson: Will the hon. Gentleman give way?

Mr. Cook: I have already given way to the hon. Gentleman once.
As I have said, the case for Britain's pits is not based on a nostalgic affection for the past; the case for saving our coal industry is based on their present success. Ironically, only last week British Coal issued a press release showing


that productivity had risen by a quarter in the past year, and that, in the past eight years output per man had arisen by 300 per cent.
If any other industry had shown such spectacular advances, Ministers would have showered it with Queen's awards; they would be queuing for photo-opportunities with the success story. The Prime Minister would be memorising statistics in front of a mirror, in order to reel them off at Question Time. Instead, because it is the coal industry, this industry is treated with vindictive vandalism by Ministers who are determined to prove that they were right all along when they told us that 31 pits would have to close.
The White Paper was not about how to keep miners' jobs; it was about how to keep their own jobs while ending the miners' jobs. The White Paper was always a fraud and, since the two closures, it can be seen to be a fraud. It must be seen to be a fraud even by the Conservative Back Benchers who were taken in by it last March. I forgive them for being taken in at the time; I am prepared to accept that they voted in good faith, thinking that they would save 12 pits, but they now know that they did not. We shall not forgive them—and the miners will not forgive them—if they let themselves be taken in again.
I give Conservative Members this warning: if the Government get away with it tonight, more of the 12 pits will close before the House returns from the summer recess. If Conservative Members want to save those pits, they must do it tonight. They will not get a £10,000 bonus if they vote with us tonight—that is a cynical ploy used by the Government—but they will stop more pit closures, halt the destruction of more coalfield communities and prevent the loss of more coal reserves. That is what we shall vote for tonight; it is what the nation wants the House to vote for tonight, and it is what Conservative Members should join us in voting for.

5 pm

The Secretary of State for Employment (Mr. David Hunt): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:
'welcomes the Government's acceptance of the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237), and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation, the wide ranging package of measures to assist the regeneration of coal field areas, the commitment by British Coal that they will offer to the private sector pits which they do not themselves wish to keep in production, and the Government's intention to bring forward as rapidly as possible the legislation necessary to privatise British Coal.'.
The amendment stands in the name of several of my right hon. Friends, including the President of the Board of Trade. I am sure that I speak for all hon. Members when I say how pleased we are that he has been able to return home and that we wish him a speedy recovery to full health.
I have participated in many coal debates in the past 10 years, for several years as the Minister with responsibility for coal, then as Secretary of State for Wales and now as Secretary of State for Employment. I hope that the many hon. Members who have participated in the various debates will accept that there is no monopoly of concern for the coal industry from one party rather than another.
If Labour Members reflect for a moment and read the reports of the many debates in Hansard, they will find that concern for the coal industry and its employees could be found in all parties.
My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) scored a magnificent try against the hon. Member for Livingston (Mr. Cook) when he pointed out that, under a period of Labour Government, 277 pits had closed. The hon. Gentleman immediately leapt to a conclusion; Hansard will show that he used statistics relating to the last period of the Labour Government, but he made a fatal error. My hon. Friend was, of course, referring to the period of Labour government between 1964 and 1970. During that period, 277 pits closed. In 1967, just about 60 pits closed.

Mr. Ronnie Campbell: rose—

Mr. Hunt: The hon.Gentleman may not like the facts, but I am going to give them to the House.
Under that period of Labour government, in one year, 60 pits closed and, in the following year, just under 60 pits closed, so just over 120 pits closed within two years. If my right hon. and hon. Friends refer to Hansard of that time, they will read the barrage of criticism from all parties against the then Labour Government because 185,000 coal industry employees lost their jobs in their local collieries.

Mr. Campbell: rose—

Mr. Hunt: I shall give way in a moment.
As I said, 185,000 jobs were lost in the collieries, and there were no generous redundancy schemes then. The amount of money received by someone leaving the coal industry at that time was pretty mean, and Labour Members said so at the time. There was no enterprise company charged with bringing new life to coalfield communities,and there was no opportunity for employees leaving the coal industry to find another job or another chance. When the hon. Member for Livingston seeks to put on one side that period of Labour Government, he does himself and his party an injustice. The concern expressed at that time was expressed by all parties.
The hon. Member for Livingston is right to recall that there were substantial further pit closures in the 1970s under a Labour Government. I think that by 1979 the number had grown to 353. We have to ask why that happened.

Mr. Joseph Ashton: Because they were all worn out.

Mr. Hunt: No, not because they were all worn out. Of course, that was true in some cases, but—

Mr. Ronnie Campbell/: rose—

Mr. Hunt: I shall not let a rather silly comment pass —I am going to deal with it. I ask you to note, Mr. Deputy Speaker, that the hon. Member for Blyth Valley (Mr. Campbell) is trying to change the subject quickly, but I shall not let the hon. Member for Bassetlaw (Mr. Ashton) get away with it. I shall give way, but I am going to deal with the point raised. [Interruption.] Labour Front-Bench Members should not get excited.

Mr. Ashton: rose—

Mr. Hunt: I shall deal with the sedentary comment made by the hon. Member for Bassetlaw who can then


respond. The pits were not closed because they were all worn out. He has only to read the statements made at the time by Labour Ministers: the pits were closed because there was no market for their coal. He has to ask himself why. It was because the domestic market contracted dramatically; people stopped burning coal in their homes and started burning what the hon. Member for Livingston referred to as the sweet premium fuel called gas. He forgot to mention, however, that its calorific value is much higher than that of coal.
If the hon. Member for Bassetlaw reads Hansard, he will find statements made by Labour Ministers in which they said that, sadly, there was no market for the coal and it would therefore be wrong to keep the pits open, even though there were still a number of substantial recoverable reserves.

Mr. Ashton: I came to the House a year or two before the Minister. I arrived in 1968 in a by-election, during a pit closure in my constituency. Unemployment was running at 1 per cent. and miners who wanted to move to another pit were found jobs—they were not forced into redundancy. One of the reasons for the closure, which the Secretary of State has not mentioned, was the price of oil. It was at rock bottom until the war between the Arabs and the Israelis in 1973, which caused it to rocket. The price trebled around the world and, incidentally, it also caused inflation to treble, a problem for which he has always blamed the Labour Government. Every miner who wanted a job at another pit was moved. Thousands moved to my constituency where there are still three profitable pits. The Secretary of State offers only half-truths, like all solicitors and cheapjack lawyers who do not have a brief.

Mr. Hunt: The hon. Gentleman offers a lot of bluster but very few facts, as befits an occasional columnist for a newspaper—I shall not embarrass him by saying which newspaper. He should reflect on what he said. I will not embarrass Opposition Members by asking how many of them burn coal in their own homes—[Interruption.] I suppose that the record will not show that there was a small smattering of individuals.

Mr. Kevin Barron: Will the Secretary of State give way?

Mr. Hunt: I will give way in a moment.
The point that I was making stands. There was a savage contraction in the domestic market for coal.

Mr. Ronnie Campbell: I am not surprised that the Government want to close the 12 pits. A few years ago, the Secretary of State was the Minister responsible for coal and at that time I worked in Bates colliery. We went through the colliery review procedure, which was fairly new at the time, and Bates colliery won. The right hon. Gentleman was the Minister responsible for coal and that pit still shut. I was a miner at that pit and I know all about it. There were still 29 million tonnes of coal in that pit and it could still be working today.

Mr. Hunt: The hon. Gentleman will recall that British Coal spent some time considering the report of the independent—

Mr. Ronnie Campbell: rose—

Mr. Hunt: I hope that the hon. Gentleman will accept that British Coal spent some time considering the report and, in the end, it did not accept the view that the hon. Gentleman has just put forward.
The hon. Member for Blyth Valley has just made a point that I made earlier. Pits closed when they still contained a substantial amount of coal because the market changed. I examined the case for Bates colliery very carefully at the time. I was convinced that British Coal had made the right decision. However, it was a matter for British Coal to determine.

Mr. Riddick: Will my right hon. Friend give way?

Mr. Hunt: Yes, in just a moment.
The issue raised by my hon. Friend the Member for Bolton, North-East should not be shrugged aside easily. From time to time, coal must face substantial changes in the energy market.

Mr. Riddick: A few moments ago, my right hon. Friend challenged Opposition Members to say how many of them burnt coal in their own homes. Is he aware that my local Labour-controlled council—Kirklees council—has, over the past year, forced hundreds, if not thousands, of my constituents to stop burning coal by imposing unnecessary smokeless zones on the rural parts of my constituency, despite the fact that emission figures of smoke and sulphur dioxide in those areas fall within the guidelines set by the Department of the Environment and the European Community? Is that not plain Labour hypocrisy?

Mr. Hunt: rose—

Mr. Martin Redmond: On a point of order, Mr. Deputy Speaker. Will you draw the attention of Conservative Members to Government legislation regarding smoke control zones?

Mr. Deputy Speaker (Mr. Michael Morris): That is not a point of order for the Chair.

Mr. Hunt: My hon. Friend the Member for Colne Valley (Mr. Riddick) has raised a very important point. I wonder how many Opposition Members have been councillors in local authorities that have decided not to install coal-fired units in local accommodation. I could quote many examples of that. However, I simply raise that matter to refute the point made by the hon. Member for Livingston.
I want now to consider what happens today.

Mr. John Evans: rose—

Mr. Barron: rose—

Mr. Hunt: I should give way to the hon. Member for Rother Valley (Mr. Barron).

Mr. Barron: I should like to take the Secretary of State back to the point about pit closures. Will he name any Conservative or Labour Government who have ever closed coal mines in this country for foreign coal imports?

Mr. Hunt: There has always been a level of imports from other countries and that has been the case under all Governments—[Interruption.] I am answering the point raised by the hon. Member for Rother Valley. I have always seen a level of coal imports—

Mr. Barron: What about power stations?

Mr. Hunt: I have been present in many coal debates when Opposition Members have urged the Government to put a cap on the level of imports as if protectionism was the answer for the coal industry. I reject that argument. The coal industry now faces a substantial change in the energy market and that must be faced with reality instead of trying to introduce open-ended subsidies, which the Select Committee on Trade and Industry did not suggest but which was implicit in the comments of the hon. Member for Livingston.

Mr. John Evans: The Secretary of State has referred to the difficult period in the 1960s and 1970s when quite a number of collieries closed. The Secretary of State represents a north-west constituency and he will acknowledge that a substantial number of small collieries in St. Helens and Wigan closed for two major reasons. The first was because they were reaching the point of exhaustion and the second was that many of their reserves could be exploited from a brand new big colliery called Parkside.
Will the Secretary of State acknowledge that the vast difference between that period and the closure of Parkside is that Parkside has about 30 million tonnes of coal reserves which will now be lost to the nation and will remain in the ground for ever?

Mr. Hunt: I will deal with that point by referring back to the point made by the hon. Member for Bassetlaw, who said that the pits closed because they were worn out. The answer is not as simple as that. Some pits were exhausted while some were economically exhausted. Some could be accessed from other shafts in other mines. I am aware of all that. Equally, some pits had a substantial amount of coal which could still have been mined. However, the market, in the phrase used by a Labour Minister at the time, had collapsed.
I am trying to explain how I believe coal has a future. However, it will not have such a future if we go down the route advocated by some Opposition Members of trying to introduce an open-ended subsidy and of trying to keep alive uneconomic pits.

Mr. Peter Hardy: Will the right hon. Gentleman give way?

Mr. Hunt: I will give way in a moment, but I want to make this point because it is very important.
The hon. Member for Livingston said that output per man shift in the past few years has increased substantially. That is true. Since 1979, this Government have invested a substantial amount of money in support of the coal industry. The figure now totals £18,000 million. In the last financial year, that support has enabled British Coal to have a fixed capital programme of more than £180 million. There will be a similar figure in this financial year. It is good that the industry has responded by improving its output per man shift.

Several hon. Members: rose—

Mr. Hunt: I will indicate when I am ready to accept interventions, which will be in just a moment after I have made my next point.
The hon. Member for Livingston should consider what happened during the period of the Labour Government between 1974 and 1979 to which he thought my hon. Friend the Member for Bolton, North-East was referring.

Listening to the Labour party, one would think that Labour has a monopoly of concern for improving output per man shift. However, I will remind the House of the figures.
In 1974, when the Labour Government took office, output per man shift was 2·94 tonnes. What was the output per man shift by 1979? Having listened to the hon. Member for Livingston, one would have thought that output per man shift had increased substantially by 1979. In fact, it had declined from 2·94 tonnes to 2·89 tonnes.
In the period that I have referred to, there was half a decade of inaction in respect of the support being given to coal and in respect of the response of those who worked in the industry. Opposition Members should reflect on that for a moment before they quote the nonsensical figures that they have put forward from time to time—[Interruption.] The hon. Member for Livingston cannot dispute the figures for output per man shift. [Interruption.] The hon. Member for Bassetlaw keeps shouting, "Nonsense". He thinks that he has made a point. He has not made a point at all, because output per man shift has been calculated on the same basis over the period that I am talking about, and, of course, it relates production to the number of people in the industry.
Let me deliver the figures again. In 1974, it was 2·94 tonnes per man shift, and in 1979, it was 2·89 tonnes.

Mr. Ashton: What was the total tonnage?

Mr. Hunt: I am responding to the points raised by the hon. Member for Livingston. That is what debating is all about, even if the hon. Member for Bassetlaw does not understand it. Output per man shift was announced by British Coal just a short time ago as having reached 8–5 tonnes per man shift.

Mr. Ashton: What is the total tonnage?

Mr. Hunt: That is a creditable achievement.

Mr. Deputy Speaker: Order. I keep hearing a sedentary intervention from the hon. Member for Bassetlaw (Mr. Ashton), "What is the total tonnage?" If the hon. Gentleman wishes to intervene, he should rise in his place and see whether the Secretary of State will give way; otherwise he should stay quiet.

Mr. Hunt: I am going to answer the hon. Gentleman. Do not let me miss an opportunity to put the hon. Gentleman right.
I now quote from the National Coal Board, as it then was, summary of statistics. I can now confirm that all undergound output per man shift in 1974 was 2·94 tonnes and in 1979 it was 2·89 tonnes. What about the output? National Coal Board mines output in 1974 was 116·9 million tonnes, and in 1979 it was 109 million tonnes.

Mr. Ashton: rose—

Mr. Hunt: The hon. Gentleman should heed your words, Mr. Deputy Speaker. It is about time he stopped his nonsensical sedentary interventions. I have been seeking for the past few minutes to deal with the points that were raised by the hon. Member for Livingston. The speech of the hon. Member for Livingston read rather like the curriculum vitae for George Orwell's Minister of Truth. I have never heard such a rewrite of history.

Mr. Ashton: On a point of order, Mr. Deputy Speaker. You rose to your feet and criticised me—probably quite


rightly—for making interventions from a sedentary position. The Minister will not give way, although he keeps challenging me. What is the total tonnage for this year and what is the forecast for next year?

Mr. Deputy Speaker: The hon. Gentleman is not being fair to anybody—either myself or the Minister. I heard him ask from a sedentary position, "What was the total tonnage output?" I heard an answer given. Whether or not the hon. Gentleman likes the answer is another matter, but the Secretary of State gave way.

Mr. Hunt: We go from bad to worse with the hon. Gentleman. We are, of course, dealing with tonnages which are well known to the House, and up-to-date figures are set out not only in the energy review but in the Select Committee's report.

Several hon. Members: rose—

Mr. Hunt: Just one moment. I was dealing properly with the hon. Gentleman's sedentary intervention. I do not want to occupy the House any more with his sedentary interventions, but I was giving the output per man shift figures for 1974 and 1979, and his sedentary intervention was, "What was the total output?" I have now given the total output figures for 1974 and 1979, and he is still not satisfied, but, of course, those figures do not prove his point.
The point that I was making is that we should concern ourselves in this debate–1 hope that hon. Members will address the real issues, and the real issue which the hon. Member for Livingston did not address—[Interruption.] I would be obliged if Opposition Members did not criticise their hon. Friend so much by saying that he has not dealt with the issues. I am dealing with issues to refute the hon. Gentleman's point.

Several hon. Members: rose—

Mr. Hunt: Just one moment. As we look forward to the future, let us consider the consequences of the second substantial shift in the marketplace for coal that is now used for electricity generation, just as we considered the first substantial shift in the marketplace away from coal being used in the—

Mr. William O'Brien: Will the Secretary of State give way?

Mr. Hardy: Will the Secretary of State give way?

Mr. Hunt: I shall give way again in a moment.
The point that I am making is that we have to address the substantial shift in the market for domestic coal, just as we did between 1964 and 1970; now, we look at the shift in the market for coal for electricity generation.
The Government carefully read the report of the Trade and Industry Select Committee and accepted its main thrust. Specifically, if Opposition Members will recall, we accepted the main recommendation and offered a temporary and declining subsidy for additional sales of British deep-mined coal. We have asked the industry to provide us with firm evidence of the additional sales that it believes that it can secure and the amount of subsidy that it will require.
If hon. Members look at the Order Paper, they will see that, immediately following this debate, there is a motion on financial assistance to industry, which

authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance … sums exceeding £10 million in total but not exceeding 120 millon in total to support sales of coal produced from underground mines in the United Kingdom.

Several hon. Members: rose—

Mr. Hunt: I shall give way later.
That motion, of course, releases the necessary funds to keep the commitment that was made by my right hon. Friend the President of the Board of Trade. I shall put the record straight again and report exactly what my right hon. Friend the President of the Board of Trade said in his statement on the coal industry on 25 March. He said:
I cannot guarantee that supplementary sales will be achieved by British Coal.
Later, he said:
Finally, let me remind the House of what I said earlier. There can be no guarantees. The market for coal is complex and unpredictable. Even among the experts, opinions differ. I have done all that I reasonably could, consistent with economic realities and legal constraints, to increase the opportunities for British Coal.
It is now for British Coal to make the most of these opportunities. The outcome will be settled, as it should be, in the marketplace. Our policies will give the industry every chance of strengthening its position and achieving future success. It is now up to the people who work in the industry to build on this."—[Official Report, 25 March 1993; Vol. 221, c. 1230–31.]
I had to quote that statement because the hon. Member for Livingston did not quote Hansard. He confined himself to quoting newspapers. When we quote newspapers, we deny the existence of debates and statements in the House. Nothing could have been clearer than my right hon. Friend's point, and I have quoted it in order to put the record straight.

Mr. Hardy: Is it not incredible that, a few moments ago, the Secretary of State boasted about the vast amount of public money that the Government invested in the coal industry and yet the same Government have been party to rigging the market to prevent the coal industry from taking advantage of the most astonishing increases in productivity to which the right hon. Gentleman might refer?
Is the Secretary of State aware that, a few weeks ago, before the President of the Board of Trade was taken ill —one hopes that he will be quickly back to the House to maintain the debate—his hon. Friend the Member for Rochford (Dr. Clark) and I were present at a meeting at which the President of the Board of Trade said, "Isn't it a pity that the enormous increase in productivity in the mining industry did not take place earlier?"
The previous chairman of the board had to get to his feet to contradict the President of the Board's point, because that increase in productivity has been taking place almost consistently for the past four or five years. Having achieved record productivity, unmatched in the rest of British industry, is it wise for the Government to write off their investment in mining communities as they are doing?

Mr. Hunt: I very much welcome the hon. Gentleman's comments about my right hon. Friend the President of the Board of Trade. I am grateful to him for ensuring that they were made by the Opposition. So far as the allegedly rigged market for energy is concerned—[Interruption.] All right— so far as the rigged market for energy is concerned, it is rigged in favour of coal because—

Mr. Stevenson: rose——

Mr. Hunt: Let me answer the point.
As the President of the Board of Trade pointed out, there is a subsidy of about £1 billion a year, which goes directly to ensuring that the market is weighted in favour of coal. We are now dealing with a market that is becoming freer, and decisions are being made by energy generators in the context of that freer market.
If Labour Members re-examine the report of the Select Committee on Trade and Industry, they will see that several recommendations have been broadly accepted by the Government. The Government have accepted the first recommendation relating to the reform of working practices. They have accepted the broad thrust of recommendations Nos. 14, 15, 16 and 17 relating to the subsidy for additional sales of coal and recommendations Nos. 27, 28 and 29 relating to the establishment of an independent licensing authority. The White Paper in paragraphs 30 and 31 proposes extra funding for the support of clean coal technology. In the White Paper, the Government have broadly accepted paragraph 32 relating to the annual report of the energy commission and the energy advisory panel.
As I said previously, the future of the coal industry has been debated in a way in which such matters should be debated—with informed reports from Select Committees. However, the Government are not bound to accept all of the recommendations. For example, as my hon. Friend the Member for Leeds, North-West (Dr. Hampson) pointed out earlier, it would be illegal to accept recommendation No. 7.
Recommendation No. 11 relates to the reduction in output from opencast mining. I simply ask those Labour Members who are sponsored by the Transport and General Workers Union and who have made it clear that they do not want to see any reduction in jobs in the opencast coal industry and the nuclear industry to reflect for a moment. Trade unions throughout the country have made it clear that they do not want to see any reduction in jobs in the oil and gas industry.

Dr. Hampson: My right hon. Friend will appreciate that the Select Committee tried to strike what we called a "balanced energy policy". In a way, that "balanced energy policy" could be interchanged with what the Leader of the Opposition called an "integrated energy policy" in a debate in December 1975. I remind my right hon. Friend that the Leader of the Opposition said that the Labour Government had
an effective policy for the development of oil and gas resources but a policy for our coal industry and also for our nuclear industry.
His balance was interesting—he did not put the coal industry first. He said:
This is a policy of which we should be proud". —[Official Report, 8 December 1975; Vol. 902, c. 164.]
That sort of balance and integration was at the heart of the Select Committee's proposals.

Mr. Hunt: I am grateful to my hon. Friend for putting the record straight.

Mr. Terry Lewis: First, I declare that I am sponsored by the Transport and General Workers Union. I also have a local interest in opencast mining. Many of us are fearful of, and opposed to, the extension of opencast mining on green belt land and land that is contaminated by previous workings. Some of us want to see a more strenuous approach taken by the Secretary of State and his

colleagues, especially with regard to mineral planning guidelines, so that local authorities and local communities can make their own decisions—and not be pressed by Whitehall into accepting the national needs as perceived by Ministers—and safeguard the environment at a time when British opencast miners submit their hideous opencast applications.

Mr. Hunt: The hon. Gentleman criticised me previously for the length of my speech. I simply point out to Labour Members that I am prepared to give way, but they must accept that my speech will be much longer as a result—[Interruption.] I will deal with the point, although the shadow Secretary of State for Employment criticised me for making too long a speech in a previous debate after I had given way to 25 interventions. I believe that Ministers and Opposition spokesmen should give way and I now respond. However, in giving way, I hope that Labour Members will recognise that my speech will be longer as a result.

Mr. Robin Cook: rose—

Mr. David Hunt: Let me deal with that point. I understand that the hon. Gentleman has already given considerable advocacy to the views of his constituents on environmental issues not only to the Minister for Energy but to the Secretary of State for the Environment. He will know that there are checks and balances in the system to ensure that environmental considerations are taken properly into account.

Mr. Cook: I think that my hon. Friends are concerned not about the length of the right hon. Gentleman's speech but about the fact that, in the 35 minutes that he has been speaking, he has not once addressed the crisis in the coal industry. If he maintains that the crisis is caused by a free and open market, which I think he referred to earlier, will he now address himself to the central point of our case, which is that British Coal cannot sell coal to the generators at a price that would produce electricity to the consumer at a cheaper price than from any other source?

Mr. Hunt: I have already said that we must deal with a dramatic contraction in the market for coal for electricity generation. To deal with the hon. Gentleman's specific point, my right hon. Friend the President of the Board of Trade made it clear to the House that he accepted the broad thrust of the Select Committee's recommendation that a subsidy should be provided to ensure that genuinely additional sales of coal for electricity generation could be provided by ensuring that the difference between world energy prices and the cost price was covered by such a subsidy.

Mr. Stevenson: rose

Mr. Hunt: I shall deal with the point raised by the hon. Member for Livingston and then I shall give way.
The subsidy is there and available not only to British Coal but to the private sector to ensure that the private sector can take advantage of genuinely additional sales of coal to the electricity generators.

Mr. Robin Cook: The House is aware that the subsidy has been in place since March. The question I put to the Secretary of State is this: now that the subsidy is in place and the price of coal could provide cheaper electricity than any other source, and if it is a fair market, why will the


generators not buy it? If the Secretary of State will not answer my question, will he answer the question from ICI? Why is ICI being asked to pay twice the price for electricity that it would pay if the generators bought that coal?

Mr. Hunt: I remember another recommendation made by the Select Committee [Interruption.] This directly answers the point made by the hon. Gentleman. The Select Committee recommended that electricity generators should keep a minimum of 20 million tonnes at the power stations. At present, the figure is 30 million tonnes. That 30 million tonnes at the power stations obviously has an effect on the market. I have made it clear that the subsidy is there. Provided the House approves the subsequent motion on the Order Paper, the subsidy will be in place and the money will be available. It will then be for British Coal to ensure that it secures those additional contracts.

Mr. Cook: I am delighted that the Secretary of State referred to the same commitment that I referred to earlier—that is, that the generators should maintain stocks of not less than 20 million tonnes. Currently, the two generators propose to reduce their stocks to 10 million tonnes. May I take it from what he said that the Government will order the generators to maintain a level of 20 million tonnes, which will release additional markets?

Mr. Hunt: As far as the tonnages kept at the power stations are concerned, I understand from my hon. Friend the Member for Rochford (Dr. Clark) that we are discussing with the electricity generators what the level should be. What I said is true: although the recommendation was 20 million tonnes, the amount at the generators today is 30 million tonnes.

Dr. Michael Clark: My right hon. Friend has referred to what the Government have offered to do to help British Coal to bring its price down in order to enter markets that would otherwise not be open to it. He has also mentioned that it is up to British Coal to find those markets and, in many ways, I agree with him. Does he accept, however, that it is very difficult for British Coal to find all the markets that it might want for generation if the generators are insistent on building new gas-fired power stations and will not offer coal-fired power stations for sale at a reasonable price?
Would not it help enormously to overcome the problem of finding markets for British Coal if the generators were reminded of their duopoly position and of the obligations they have? They should be encouraged to sell surplus coal-fired power stations at a realistic asset price rather than try to sell them at a price equivalent to the cost of building new high-technology power stations that those sold-off power stations would then have to compete against?

Mr. Hunt: My hon. Friend has made an important point that I will bring to the attention of the generators. I will also bring it to the attention of the Director General of Electricity Supply, because, although he is aware of the problem, my hon. Friend's point carries an important message for the industry.
British Coal has opportunities open to it. In the long term, its success will lie in its productivity being continually improved and its overheads reduced. I strongly believe that privatisation is urgently necessary for that industry not only because it will remove the

constraints of public ownership but because privatisation will do even more to secure a proper future for our coal industry.
If the jobs of miners were preserved artificially, that would be done at the expense, immediately, of employees in other energy industries whether nuclear, gas or opencast.

Dame Elaine Kellett-Bowman: At the expense of gas.

Mr. Hunt: As my hon. Friend has said, it is a fact that every new gas-fired station will result in increasing job opportunities in that industry.
It is most important to offer real hope for the future. That will not be done by seeking to persuade miners that they have long-term employment prospects in an industry faced with a contracting market. They know that themselves. When they go down the pits, they know that most of those pits have a strictly limited life. [HON. MEMBERS: "Come on!"] Oh yes, they do. I have been underground in nearly 30 coal mines and I have seen some wretched conditions caused by narrow seams. I have seen coal produced with high chlorine, sulphur or ash content. I have seen limited seams that offer a limited life.
Surely it is far better to keep faith with those we care about in the coal industry by ensuring, now, that we provide jobs for the future by putting the necessary investment into those coal communities to provide additional jobs. My experience as Secretary of State for Wales has led me to the conclusion that one does not keep jobs in the Rhondda valley, for example, where once there were 50 coal mines, but now there are none, by artificially prolonging the life of exhausted pits. One provides jobs for the future by bringing in new industries and providing new high-tech opportunities.

Mr. Winston Churchill: My right hon. Friend is speaking as though we had a free and open market in energy supplies, but he knows very well that that is not the case. He knows that the nuclear industry is guaranteed a market for every kilowatt hour that it produces and that the gas industry and Electricity de France have privileged access to energy markets, which are not available to coal.
Three months ago, my right hon. Friend the President of the Board of Trade, to whose return to the House and full health we look forward at the earliest opportunity, gave an undertaking that he and the Government would work to widen the market for coal. That action, alone, can secure the future of the 12 so-called reprieved pits.
Can my right hon. Friend tell the House what specific steps the Government have taken in those intervening three months to underpin the market for coal? Have they reined in the French connector supplies and, given the prospect of the dash for gas, extended the market for our coal?

Mr. Hunt: A great deal of activity has taken place. It is the party of instant results that has ensured that we debate the subject today. I very much hope that we shall see an opportunity for not only British Coal but the private sector to secure genuine additional sales. We will, of course, continue to strive for that.
I hope that fair-minded Members will acknowledge that, when I was Minister with responsibility for coal, I did my best to secure additional markets for it. In the present


market atmosphere, however, it is difficult to secure them, and I hope that my hon. Friend the Member for Davyhulme (Mr. Churchill) recognises that.

Mr. Allan Rogers: The Secretary of State has referred to my constituency and I should tell him that it had, at one time, 63 coal mines, and not 50 as he said. He has suggested that he is closing coal mines on two grounds—first, because they have a finite life and, secondly, out of kindness, common humanity, because of their poor conditions. I presume that the right hon. Gentleman will extend that practice to the rest of the United Kingdom and give it the benefit of his humanity as well.
Will the right hon. Gentleman address the issue that is of vital concern to people in the industry, perhaps not those in south Wales, because most of the pits have closed, but certainly in the rest of the United Kingdom? It is no good talking about the finite life of a particular colliery or a particular coalfield when pits with hundreds of years of coal reserves left in them are being closed. If he is hell bent on closing those pits, will he provide some alternative work for the people in that industry, rather than simply deciding to close those pits because of the Government's dogma and their 10-year pursuit of the mining industry?

Mr. Hunt: I recall standing with the hon. Gentleman at Oakdale business park, where a great deal of money has been spent on restoring a derelict site—the old banana tip in Rhondda. I hope that that business park will result in many new jobs coming to the Rhondda valley.
The hon. Gentleman should remember, however, that we are dealing with the market for coal, and not any of the other matters that he sought to attribute to me. I hope that he will accept that Wales offers good examples of communities looking to the future. They are entitled to do so because of the substantial amounts of partnership money that is available through the private sector and the public sector working together. The announcement of £243 million for England and Wales represents such partnership money and is available to provide and secure job opportunities.

Mr. Don Dixon: Get on with it.

Mr. Hunt: I am still answering the point raised by the hon. Member for Rhondda (Mr. Rogers). I will come to a conclusion in a moment, but it is right to answer the points raised.
I should like to remind the hon. Member for Rhondda that I am proud of the fact that, together with Lord Walker and the then National Coal Board, I created an organisation called British Coal Enterprise Ltd. That organisation has just published its annual review of activities, the eighth such report, for 1992–93 and I hope that the hon. Gentleman will read it. It lists 87,500 job opportunities that have been created since 1984–85. I believe that that is a good result. [Interruption.] The hon. Gentleman should not allow his hon. Friends on the Opposition Benches to belittle the work of British Coal Enterprise Ltd., which has done an excellent job. It will continue to have the full support of the Government.

Mr. Cash: I, too, pay tribute to my right hon. Friend for the work that he did in his previous capacity. Indeed, he

and I worked very closely together in relation to. the coal strike of 1984. I pay tribute to him also for his work in connection with British Coal Enterprise.
Does my hon. Friend agree that one of this country's main difficulties is the increasing level of public expenditure? Does he know that, in terms of central Government expenditure alone, the cost of closing the mine at Trentham, let alone the one at Silverdale, will be £85 million to £90 million in the first year and that that will be barely offset by the amount of money coming back?
Is my right hon. Friend aware of Conservatives' concern about monopolies? The lack of access, under a privatised regime, to the core contracts of mines is itself an offence against the principles that the party stands for. That is compounded by the lack of a level playing field in Europe. My right hon. Friend should understand that some of us who agree with him in respect of many issues take a very strong view about the way in which this whole matter has been dealt with, as it offends Conservative principles above all else.

Mr. Hunt: I want to see a level playing field in Europe. That is why I am very much in favour of the Maastricht treaty, which goes some way towards restoring that situation. My hon. Friend has done a very good job for his local colliery, but he will accept that it lost a considerable sum of money last year. Ultimately, it is for British Coal to determine the future of each colliery.
The future for coal depends on the market—in particular. the tonnages that can be sold to the generators. The Government cannot create an artificial market for coal without damaging many other jobs. Coal must compete with other energy sources. We cannot just pretend that nuclear energy, gas and oil do not exist.
What the Government can do is create the opportunity for additional sales. Following publication of the report of the Select Committee on Trade and Industry, that is exactly what my right hon. Friend did. The subsidy that the Government have made available to British Coal—this is reflected in a later motion on today's Order Paper—will help the company to match world prices for sales over and above their core contracts with the generators. With that subsidy, and with increased productivity, coal has a future. That future will be secured better in the private sector, and the Government will bring forward early legislation on privatisation.

Dr. Kim Howells: If that is the case, why is the Aberthaw contract of the Tower colliery, in which there has been considerable investment, and which is one of the last 20 supposed to be safe, being cut by 200,000 tonnes a year? Why has the right hon. Gentleman said nothing about the way in which management—Mr. Neil Clarke and the chairman of the coal board—have backed out of efforts to find new markets and have been absolutely silent on the question of the fight for greater markets for coal? Is there any collusion between the Government and the chairman of the coal board to facilitate a management buy-out?

Mr. Hunt: I gave way to the hon. Gentleman because I have had tremendouse respect for his background in the industry and, indeed, for his valiant fight for the true interests of miners, especially at a very difficult time for the industry. Obviously, decisions about individual collieries must be a matter for British Coal. The hon. Gentleman


will remember that when he was involved, in a full-time capacity, with the National Union of Mineworkers, that was always the basis of decisions.
No Government—Labour or Conservative—have ever tried to second-guess British Coal or the former National Coal Board about decisions on individual collieries. That is why I have tried, in this speech, to put forward the view that jobs in coal, as in any other industry, must depend on the industry's success.
The reality is that the market has changed. Industrial change cannot be avoided. It would be totally wrong to destroy jobs by imposing high electricity prices on industry. This country cannot, in a very competitive world, afford to have an economy preserved in the past. Our industries have to be efficient if they are to compete in the future. [Interruption.] One of my hon. Friends has shouted, "The chemical industry."
That is a very good example. Our chemical industry is one of the most successful in the world. If we are to ensure that it remains a world leader and that the jobs depending on it are retained, we cannot shackle it with high electricity prices.
With regard to those who are leaving the industry, the Government have provided opportunities—not only with the £243 million regeneration package or with the support for British Coal Enterprise, but also with the whole regeneration strategy that we have endorsed since 1979. This has been done before. It has been done at Shot ton and Corby and in other communities affected by industrial change. Unemployment in Corby is now below the national average—something that not even the doubting Thomases of the Opposition would have forecast in 1979.
From this debate, there is a clear message to the coal communities. First, I strongly believe that coal has a future in a highly competitive energy market. The support that the Conservative Government are providing will secure that future. Privatisation will create a profitable industry able to survive on its own. Secondly, where pits close, new businesses and new jobs will be created to replace those that disappear. There is a future—a future for coal, and a future for coal communities. I urge my right hon. and hon. Friends to throw out the motion and support the

Mr. Tony Benn: I have heard many Energy Ministers speak, but I have never heard a more disgraceful speech than the one that has just been delivered by the right hon. Gentleman. Many thousands of people in the mining communities will have expected from the Secretary of State a serious account of the Government's energy policy. I contrast the right hon. Gentleman's speech with that of the Secretary of State for Defence, who, just after Question Time today, announced a defence review. The Secretary of State for Defence tried to measure our resources against our commitments.
Successive Energy Ministers, of whom I am proud to have been one, have been custodians of 300 years' worth of coal reserves—1,000 years, if the coal under the North sea is included—and of other energy sources, notably nuclear power, as well as gas. If the policy that the Secretary of State mentioned were applied to the farming industry, with its huge subsidies and set-aside grants, there would undoubtedly be an outcry from Conservative Members representing—

Mr. Eggar: rose—

Mr. Benn: I want to make my point. The hon. Gentleman will have an opportunity to comment in his winding-up speech. This ought not to be treated as a student debate. Those who are listening are entitled to hear the arguments so that they may compare—

Mr. Eggar: rose—

Mr. Benn: I do not intend to give way at the moment. People listening to the debate ought to be able to compare the arguments.
There has been reference to the period of the last Labour Government. I am very proud to have been the Minister who expanded the market by authorising the Drax B coal-fired power station; who agreed to and made possible the sinking of the Selby coalfield; who signed the agreement with France and said in the House that its purpose was to export British coal by wire to France—the argument that was put forward in the House when this was done; and who reached an agreement with the National Union of Mineworkers that, where pits were closed because of exhaustion, as sometimes happens, or where pits were closed because of dangerous working, as is sometimes necessary, or where pits were closed because there was access to the coal reserves of other shafts, the union would be offered a veto.
In truth, the NUM had a powerful argument—that very often there were reserves that the Coal Board did not want to explore. I offered the union an exploration grant of £500,000 for the purpose of establishing whether those reserves existed in every pit. I hope that the Minister will not try to cover up the brutality of his policy by making debating points about the previous Labour Government.

Mr. Eggar: Will the right hon. Gentleman give way?

Mr. Benn: I shall give way, but I am making a serious speech and do not want this to become a mere knockabout.

Mr. Eggar: The right hon. Gentleman said that he was proud to have signed the interconnector agreement with France and that he signed it because he thought that he was exporting coal by wire. Why, therefore, did he agree with the French terms, which meant that the French could export nuclear electricity to this country without giving us the ability to break that agreement legally?

Mr. Benn: The Minister is totally wrong. The interconnector was a physical connector, and the contract with the French was signed subsequently. The Minister's assertion is like saying that if one orders a ship, one must have ordered it to import goods from Japan. Ships are capable of carrying goods both ways. [HON. MEMBERS: "Oh, no."] It is the truth.
The Government should also mention the fact that, when the new Labour Government took office in early 1974, we discovered that the previous Prime Minister had told the Central Electricity Generating Board to import Australian coal. By the time the coal was delivered, it was so expensive that the British generating board sold it at a loss to Electricity de France because British coal was cheaper. Also in 1974, the generating board wanted some 22 nuclear power stations, which had all been set in hand by the previous Government. That number was cut back to two.
So much for the past. It would be a tragedy if anyone from a mining area listening to this debate thought that it


was just about what happened 20 years ago. The people listening to this debate want to know why pits are being closed and I submit to the House that it has nothing whatever to do with market forces.
Anyone who has been reading articles by Brian Crozier in The Times recently may know something about it. When the Government came to power in 1979, they were determined to break the National Union of Mineworkers and were prepared to sacrifice the British coal mining industry in order to do so. The Government precipitated the strike in 1984. I have forgotten which Minister said that, when there was some industrial action earlier, they were not ready for the strike.
Anyone who thinks that Arthur Scargill started the strike had better read what actually happened. Cortonwood had been given a long life; when the Government decided to close it, the local branch officials told the national officials, "We don't want you here." They wanted to decide it themselves and Arthur Scargill was told by the branch officials at Cortonwood that they had decided to resist that decision and appeal to the NUM for support.
The articles in The Times were not news to any of us. Brian Crozier, that paranoid nut who ran a private security service, managed to persuade the Prime Minister of the day that a miners' leader who wanted to keep the pit open was engaged in trying to bring about the Russian revolution in Britain. I do not know how that man could have been listened to by anyone. Hon. Members should read the book if they do not believe what he said. We know that David Hart was put in by the then Prime Minister to wreck the agreement between MacGregor and Scargill, which might conceivably have brought that strike to a more reasonable conclusion.
The then Prime Minister treated the miners as the enemy within. Like many other hon. Members, I spoke to many miners who had served in the second world war. They bitterly resented being described as "the enemy within" by a Prime Minister who had never even served in the armed forces in the second world war. From the beginning—from the "Ridley plan" through the strike—this has been a policy to destroy the National Union of Mineworkers. That is what it is about.
The Government should not try to tell us about their generous redundancy terms, because they bumped them up to get people to leave the industry. How much of the £18 billion support for the industry has been used to buy out men from the industry? How much of it has gone into redundancy arrangements? Some miners are told that if they do not accept redundancy pay, they will be put in low-paid jobs, and the redundancy pay that they receive six months later is then related to their low pay.
When they receive their redundancy pay, they want to use it to pay off their mortgages, but the Government will not let them do so. So much for a Government who believe in home ownership. Miners in my constituency who took up the offer to buy their own houses, believing that the industry was safe, thought that when they were made redundant they would at least have a roof over their heads. But when they went to the DSS, they were told that they could not spend their money. It is not real money but a coupon. It is a lump sum of unemployment pay and they

will get nothing from the DSS until they have spent every penny of it. The Government are fraudulent in their presentation of the case.
When the pits are closed, what happens? The environment in the areas where the pits have been is stripped and opencast. Local authorities are not allowed to prevent the opencasting of areas because the Government have taken away local authorities' power to determine whether opencasting should take place.
I have the privilege to represent what was a mining area —the last pit in Chesterfield closed 10 days ago—and I know that what the Minister said was wholly untrue. Last October, when the Government were forced back by a great outcry of public opinion, they pretended that they would do something simply to buy the support of enough Conservative Members of Parliament to get the measures through. When what they saw as the hubbub had subsided, they decided to carry on with closing the pits.
It is a disgraceful story because this country is richly endowed with energy sources and needs a national energy policy. It is sensible for Governments to say, as they do in other policy areas, that they will conserve gas. The previous Labour Government said that we would not allow the oil companies in the North sea to flare the gas. My right hon. and learned Friend the Leader of the Opposition and I provided for flaring controls to prevent gas being flared until the gas-gathering pipeline was available, so that gas would be available.
We did not even develop all the fields that we discovered. We had discovered a field in the Irish sea but held back its development. We could do so because it was in public ownership. We did not have to exploit everything that we discovered. We cut the nuclear component from the 22 power stations demanded by the CEGB to two. We developed the mining industry, with elaborate arrangements that involved consultation with all users of coal and electricity.
I will not say that this Government have betrayed the mining industry, because one must believe in something before being able to betray it. This is a search-and-destroy mission against the National Union of Mineworkers.
I shall finish with a political point. In 1984–85, the NUM warned people that if it went down, others would follow. Anyone looking back, 10 years later, will see that that is exactly what has happened to the health service and local government. The Government are determined to destroy not only the NUM but the trade union movement. because that is the main obstacle to what they are really about—enriching their friends and impoverishing those who create the nation's wealth. I saw figures the other day showing a 14 per cent. reduction in income among the poorest people and enormous profits made by those who have either acquired privatised assets or plan to do so.
Let us not forget that Mr. Hanson will be waiting to buy the pits that we are told are uneconomical. Such people pour money into the Tory party. Business Age, which is not a left-wing magazine, has produced a figure of £71 million as the amount donated to the Tory party. In return, donors have a chance to buy in those assets. Some Tory Ministers who were in the Cabinet that privatised particular industries sit on the boards of the companies for which they have legislated. This is a corrupt Government and people understand that they are about corruption. Ministers come along and make a lot of funny speeches without a note on the Dispatch Box. They advance a wicked argument, which does not carry any credibility.
The Government can close the pits, but they cannot abolish miners. Thousands and thousands of miners and miners' families in this country were proved right. Arthur Scargill was described as a scaremonger, but he was right. He was re-elected. He is more popular than the Prime Minister—everybody knows that. He is more popular because he told the truth; what he said in 1984–85 was true.
The Government, facing awful scandal—the profits made from the Bank of Credit and Commerce International, the Maxwell pensioners and Polly Peck—are trying to destroy the lives of highly skilled engineers who work underground with high technology arid who created the wealth on which the first industrial revolution was built. One day, we will need those people again to rebuild the country on the basis of its energy resources.

Dr. Keith Hampson: In one sense, I agree with the right hon. Member for Chesterfield (Mr. Benn). Clearly, we face a serious state of affairs in our mining communities, and it is not confined to the pit areas. The mining equipment industry produces substantial exports of about, I believe, £400 million a year, so subsidiary industries are dependent on what happens in the coal industry.
We heard enormous passion in the speech of the right hon. Member for Chesterfield, but has he forgotten what has happened in the years since he was the Secretary of State for Energy? Do I have to go back to the White Paper that he produced? Do I have to remind him of the balanced energy sources for which he argued?
At the heart of the Opposition's case is the argument that, supposedly, the market for coal is rigged. The primary reason, it is said, involved the nuclear industry. Yet, when Secretary of State for Energy, the right hon. Gentleman said that one had to have a nuclear ingredient. Twice he said that Windscale had to be enlarged and that
no energy Minister could recommend to the House"— [Official Report, 15 May 1978; Vol. 950, c. 174.]
other than having the nuclear ingredient. He cited the Royal Commission on Environmental Pollution, because there were problems involving nuclear power. But we now have problems of air pollution and the burning of carbon fuels. The environmental lobby argues about how clean the nuclear industry is compared with the coal industry. Has the right hon. Gentleman forgotten not only history, but what he has said in the House?
Of course, the Leader of the Opposition was once an oil spokesman. Of course, he defended the oil industry and the jobs in that industry, and he was right to do so. It is a major industry. The Liberal party's spokesman on the Select Committee, the hon. Member for Gordon (Mr. Bruce), rightly defended that industry.
That is why the Select Committee called for a balanced energy strategy, just as the right hon. Member for Chesterfield had done all those years ago. No modern economy can be totally dependent on coal or have a coal-dominated energy strategy.
When Labour Members call for an energy strategy, they deceive the nation. They are calling for a strategy fixed for coal. For the past three years, the energy industry in this country has been fixed for coal. How could one say otherwise when, on privatisation of the industry, the electricity companies were required to buy huge tonnages —70 million and 65 million tonnes of coal?
That was way above the amounts that they would have bought in an ordinary energy market. In addition, they did so at a price which, at £1·85 a gigajoule, was substantially more than the world price of about £1·30—and below that if one is shipping into a coastal power station.
Once we removed the rigging of the market in favour of coal, any independent business man had to say that alternative cheaper sources were available. Opposition Members constantly argue on behalf of manufacturing industry. The Select Committee on Trade and Industry is now preparing a report on the competitiveness of British manufacturing industry. Is it, in principle, wrong to seek to give British manufacturing industry the cheapest possible power source?
Opposition Members are readily saying that we should continue to protect the old position and force the electricity companies to continue to buy British coal, when it is more expensive than foreign coal or when cleaner alternatives are available.
It is a tragedy for the coal industry that alternatives have become available, but that is due to the march of history. We have developed a new gas turbine technology which was not available when the White Paper of the right hon. Member for Chesterfield was published in the 1970s. That turbine technology is an increasingly more cost-effective and efficient system of burning gas. That has changed the value of gas as a premium fuel. In recent press releases, British Coal has acknowledged that fact.
In the press release it stated that the threat that it had anticipated had become even worse. It states that gas was
reaching full capacity earlier and running at even higher efficiency levels.
That is one of the industry's key problems. In addition, summer is with us, and the industry is presented with another problem: it has to persuade people to buy coal.
The huge existing coal stocks present a big problem, but there are other factors in the equation. The Select Committee thought that imports constituted one of the two most important factors—the second was existing surface stock levels. However, that first factor is currently not the real problem. There is a low demand for coal because it is the summer, and gas is coming on to the market quickly and at ever-increasing efficiency.

Mr. Eric Illsley: The hon. Gentleman has said that manufacturing industry and industry in general will be subject to higher prices if we maintain the coal industry at its current market levels. Why has the Major Energy Users Council been complaining about the high cost of energy now and over the previous few years?

Dr. Hampson: I do not want to sound patronising, but hon. Members and people outside the House have not bothered to read the Select Committee report. It contains a section on why the heavy users have serious problems, which we have addressed. The report contains recommendations on that, and I have sympathy with those users and their problems. The heavy users such as ICI and the paper industry—not industry as a whole—have a case.
However, the general argument is different. The Select Committee report acknowledges that there is pressure on the coal market. People should not cite the Select Committee report as though it contains a series of absolutes. We were making generous assumptions, and hoping and praying that we could strike a better deal for the coal industry.
We were stretching the figures, in believing that the market could possibly reach 16 million extra tonnes. From all the evidence given at the outset, most of us knew that the market could only be about 12 million tonnes. Due to the conditions that I have just outlined, the market is less than that, and the industry is under even greater pressures.
The Select Committee added a potential 3 million tonnes to the non-electricity industry in our calculations. I do not want to bore the House with a description of how we reached that figure, but we were speculating and we must now return to reality. We must not cite the Select Committee's report as if it constituted an alternative strategy which is not now being pursued.
In many respects, the Government are seeking to do what the Select Committee recommended. British Coal has a future; a certain number of pits—we did not say how many—have a future if we can reduce the production costs of deep-mined coal to those of world prices, which are largely determined by the huge opencast pits opening all over the world. That requires the NUM and the mining unions to make great sacrifices. It is no good the unions, and the Opposition Members who represent them, digging in and saying no change.
The hon. Member for Rother Valley (Mr. Barron) said that great improvements in productivity have been made in the past four years. That is of course true, because, in the past four years, particularly since privatisation, new disciplines have been introduced into, and new competitive pressures have been exerted on, the industry to try to lower its costs and get to grips with inefficient practices. The industry has no future if we cannot reduce further its costs.
The first key factor of the Select Committee's report which the Government have acknowledged is that we must subsidise our prices in new contracts to match those of world prices. We said that we would try to squeeze the imports as much as possible, and try to squeeze French imports. The Government are desperately trying to do so, and companies such as Yorkshire Electricity are not accepting French imports. However, that alternative supply still exists for others. We have also squeezed orimulsion, but those are all small amounts in the equation.
Let us not deceive ourselves that there is a real choice. There is an efficient gas industry, and not one Labour or Conservative member of the Committee wanted to pull back from the position that it has reached. We could easily control it, in the way that the right hon. Member for Chesterfield did, because licences and consent must be granted.
The Government rightly said that, with huge gasfields such as Liverpool bay, with its sour gas, it is pointless not accepting that jobs are at stake, and that that natural resource should go into electrical supply. Unfortunately, if that is done, it squeezes the coal market—but the Select Committee said that that should be done.

Mr. Martin O'Neill: I wanted to intervene some moments ago, but the hon. Gentleman got carried away. I refer to his earlier point about productivity. The Secretary of State made great play of productivity, but I was not clear about his comparisons.
If the hon. Gentleman will cast his mind back to the 1970s, productivity included that involved in the drivages of roads, and so on—which at that time were undertaken

by employees of British Coal, or the National Coal Board as it then was. Today, drivages are undertaken by private contractors, and do not appear in British Coal's figures. Therefore, the basis of the Government's statistical comparison is totally fallacious. They are comparing unlike with like, so those statistics are invalid and should not be quoted.

Dr. Hampson: I will not enter into that technical argument, which we dealt with to some extent in the Select Committee—and we have had the Boyd report. It is a technical issue, as to what sort of drivages are best in this country. Other countries use different technological techniques and operate different kinds of pits. The point is that, however they get the coal out of the ground, it is cheaper on the world market than the product that our deep mines can produce. That is the dilemma.
So, we have to free our operators, including British Coal—the hon. Gentleman knows from the evidence that it submitted to the Select Committee that it is totally in favour of this—from various legislation introduced since the 1940s, to allow more flexibility, so that they can make better use of working time to achieve higher productivity and get costs down.
I pay full tribute to the developments in productivity of the past few years, but coal is under pressure from the twofold competition of world coal prices and a highly efficient gas industry. A British Coal press release dated 30 June rightly boasts that output per man is 23 per cent. higher than one year ago, yet that is a terrible catch-22.
Nuclear is, because of past strategies, static at around 20 per cent., but gas is increasing, and in the next two years will reach 25 per cent. That squeezes coal down to about 50 per cent. Of that coal burn, there are cheaper and environmentally cleaner coal imports. At a time when demand for coal is diminishing, productivity is dramatically improving. Fewer pits and fewer men can produce sufficient coal, even in an increased market.
Opposition Members do not have a solution any different from that of the Government.

Several hon. Members: rose—

Dr. Hampson: No, I will not give way. I was accused by the Chair in the last coal debate of speaking too long. On that occasion, I allowed six interventions—and today I have allowed three, which is very generous. I must bring my remarks to an close.
High-technology pits allow a smaller work force to produce sufficient output, even if the market stabilises. The Committee's report has been distorted by misinformation. For example, we were told today that other Governments help their industries. The British Government have a huge record of giving help. The rest of the European Community countries are running down their coal industries to a much greater extent. There is virtually nothing left in Europe, apart from in Germany.

Mr. Barron: rose—

Dr. Hampson: The hon. Gentleman can make his point in his own speech. I would like him to read the Select Committee report, which gives in table 2 the figures for the rundown from the 1970s to the 1990s. We and the Germans are in almost exactly the same position. Our output fell from 108 million tonnes in 1973 to 75 million tonnes, and that of the Germans from 99 million tonnes to 71 million tonnes.
Germans are pouring proportionately the same amount of money into coal as we are into nuclear, but they are doing that to protect the rundown of coal. The Belgians, the French, the Spanish and the OECD in general are running down their coal industries at a faster rate than this country has done over the past 20 years.

Mr. Barron: rose—

Dr. Hampson: No, I will not give way.
The coal debate is riddled with myth. Even a distinguished presenter of the "Today" programme this week endorsed, or at least did not challenge, Arthur Scargill's claim about coal reserves. Arthur said yet again that there is "more than a thousand years of coal", and that it was a tragedy that such a great resource was available and untsed. All the various estimates are in the Select Committee's report, if only people will analyse them.

Mr. Benn: They are wrong.

Dr. Hampson: No, we are not wrong. The report says that there may be about 300 years of coal left in the United Kingdom, but questions how much of it will be practicable to extract from the 50 existing pits. Practicalities reduce the term to something between 25 and 40 years. The report says—all the Labour members of the Committee signed up to this—that it is closer to 25 than 40 years in respect of existing pits.
The Select Committee spells out the fact that the real dilemma for British Coal is the investment required for new pits, such as those in Nottinghamshire and Selby. It costs about £400 million to £500 million at present-day prices to sink a new deep mine, apart from obtaining planning permission in places such as East Anglia. Coal that may be available for 200 years is not in the vicinity of existing pits. It is time the existing mining communities woke up to that fact, and stopped being deluded by people such as Arthur Scargill.
Not one expert—left, right or center—in the world anticipates that, in the next 30 years, given the likely world price of coal, because of huge opencast pits opening in Australia, South Africa, South America and North America, any Government will spend £400 million to £500 million on a deep mine, because the unit cost of coal produced there could not conceivably compete with imports.

Mr. Malcolm Bruce: Although I was a member of the Select Committee, I do not intend to dwell on its report, as did the hon. Member for Leeds, North-West (Dr. Hampson). The Committee had to deal with a situation that should never have been allowed to develop. As Select Committees are of habit all-party and must achieve a consensus, they cannot entertain radical proposals.
The Government probably hoped that they would get more time out of their announcement of three months ago. The public, understandably, are confused and concerned that, despite assurances and the rescue plan that was eventually forced on the Government, nothing appears to have changed.
The programme of privatising gas and electricity has meant that, whether wilfully or through lack of foresight, coal is being squeezed out of the marketplace. Unless the

Government are prepared to acknowledge that and do something about it, the coal closure programme will accelerate.
Some hon. Members implied that those of us who make constructive comments against the accelerated closure programme have an old-fashioned idea about the role of coal. The coal industry has been declining, and all sides have recognised the change in the market.
Two questions must be addressed, the first of which is how to manage that decline sensibly and constructively and take account of the needs of communities. Secondly, what strategic calculation is required to ensure the retention of long-term flexibility and choice?
People are beginning to realise that the Government have created such a distortion that coal will be squeezed until it is closed off as a significant alternative in a short time. Any Government who allow that to happen will rightly be accused of total irresponsibility and vandalism in respect of a major energy resource. The Government are in danger of being accused of that unless they take some action now.
British Coal is not our only coal producer, but it is our major one, and it appears to have its mind set on the belief that the only way to get the industry into profit is to contract. But contraction is becoming a spiral towards near-oblivion. It is directed not at a target figure but at a figure that is reducing all the time. There does not seem to be any will to market coal or to enter into the spirit of competition.
Today's newspapers show that the industrial market for coal is disappearing at an alarming rate. There is a lack of confidence among British Coal customers about a commitment to provide a future source. Customers do not believe that there will be guaranteed security of supply, and any company that gets itself into such a situation is on dangerous ground.
The industry is contracting. The pertinent points made by the hon. Member for Livingston (Mr. Cook) were extremely well put, but they were not even acknowledged, let alone answered, by the Secretary of State. As a Liberal Democrat, and to some extent a referee in the confrontation between the two major parties, I must say that the hon. Member for Livingston spoke for 29 cogent and effective minutes, while we had 55 minutes of waffle by an unprepared Secretary of State who did not answer any of the points raised.
One of the pertinent questions asked by the hon. Member for Livingston was, how is it that British Coal can provide a source for energy supply which is cheaper than gas or nuclear fuel, but cannot find a market? That question simply echoed in the air but produced no response whatever from the Government. Every electricity consumer and every major industrial user, not just ICI, wants an answer to that question, but it has not been addressed.
The hon. Member for Leeds, North-West (Mr. Hampson) is a member of the Select Committee on Trade and Industry, as I am. He acknowledged that, as a Member representing a constituency in the north-east of Scotland, where tens of thousands of people are employed in the oil and gas industry, I would not vote for measures that will put them out of work. However, a Government with any foresight could have created a sensible and managed energy policy under which such a choice would not have to be made. That is the Government's failure.
British Gas started with a monopsony in North sea gas, because it was the only customer. When it was privatised, and the technology for gas-fired power stations was developed, it was inevitable that the oil and gas-producing industries would try to find a market. The gas-fired stations provided just such a market, and that got round British Gas.
It is interesting that British Gas frequently argues that gas is too good a fuel to be burnt in that way. That is a legitimate point, because, after having always taken an interest in energy matters, one of the most startling pieces of evidence that I heard on the Select Committee was that the life of North sea gas is longer than the life of British coal. The presentation of that piece of evidence was historic. That is an extraordinary transition, and part of the reason for it is that there has not been a strategic calculation about what the right level ought to be.
We cannot retain our flexibility and choice with 10, 12 or 15 pits, because such an industry will be small in world terms, and its ability to compete will be restricted. The question that arises is whether anybody has more management drive and more commitment to technology and marketing than British Coal.
The other question that the Government have not answered is whether they are determined simply to reduce British Coal to the smallest possible viable and profitable corporation and then sell it to the management or anybody else; or whether they will give the coal reserves to someone who might make more of them. Even Labour Members sponsored by either of the coal unions must recognise that someone other than British Coal running a pit is rather better than having it closed, even if they would not like to face that choice.
It is deeply depressing that the Government have argued that, as North sea oil and gas have created for themselves a market for electrical generation, they should be allowed to exploit it. However, in the month that they gave clearance for that, they introduced new taxes in the North sea that will discourage the finding of more oil and gas, which is in the national interest.

Mr. Illsley: I appreciate the difficulty of the argument about whether it is better to retain pits in public ownership or under a different type of management, if that means that they will stay open. We would not agree to just any form of management taking over collieries, because the terms and conditions of employment could be lowered to such an extent that it would not be worth while for union members to work in them. The competence of the management is another factor in a scenario in which the market is contracting. At Monktonhall, mineworkers pumped hard-earned redundancy money into a venture that could fail and lose their investment.

Mr. Bruce: The hon. Gentleman is correct. As he knows, I have supported the right of the Monktonhall miners to take over their colliery, and I hope that they will succeed. It is frustrating that they have more difficulty getting access to finance than some of their competitors, who would like to profit from their difficulties.
I understand the hon. Gentleman's point, but the wider issue is that, in the national interest, we must ensure the maximum viable coal industry. The Government's strategy ensures that we will not achieve that. There is a

danger that the coal industry will be reduced to such a level that it will be too small to maintain viability and any standing as a world player, as it was in the past. That is worrying.
The environmental argument is a little spurious, because, while the Government use the contraction of the coal industry and the expansion of other sectors as environmental justification for their policy, they overrule local planning authorities to ensure the dramatic expansion of opencast mining. They do that against the wishes of local communities, in a way that is regarded as extremely damaging to the environment.
One colliery, Brynhenllys in Wales, was drawn to my attention yesterday. It is an anthracite opencast mine, that will effectively displace the deep-mined anthracite colliery in Betws. In spite of being repeatedly refused by the local planning authority, plans have been approved by the Secretary of State in the past month.
There are many other examples all over the country of the Secretary of State having given planning permission for the expansion of opencast mining to allow deep-mined collieries to be shut down. I am not convinced that that is an environmentally constructive approach.

Mr. Alan Beith: Does my hon. Friend recognise that the problem is even worse than that? Under the existing mineral planning guidance, local planning authorities, knowing that they will be overruled by the Secretary of State if they turn down an opencast application, find themselves reduced to placing extra limits, such as increasing the height of the banks, or weakening in some minor way the grounds for the application. Those planning authorities know that, even when they feel strongly that an application should be rejected, they will probably be overruled, so they feel that they might as well make the best of a bad job.

Mr. Bruce: I understand that, because, ultimately, it only involves more and more planning time. generally, the public do not want to see a dramatic expansion in opencast mining, and the Government appear to be prepared to overrule the balance of pits. That has produced the net effect that my right hon. Friend has described.
The Government continue to insist that, somehow, what is happening is simply the operation of a free market. What has happened in the past three months has proved that the free market is not working, because coal is cheaper than any other source of fuel, yet the market has not changed. It cannot possibly he a free market, in spite of the argument about stocks. It is all about market positioning —people making calculated strategic decisions to determine their place in the market.
The market is also distorted by the regime that the Government have created. They have created a privatised electricity industry, where the nuclear industry is guaranteed a market, regardless of the price for everything that they can produce. The Treasury appears to take the simple view that it simply wants the maximum revenue from the nuclear industry. The fact that one other aspect of the Treasury's books will cost millions—if not billions —of pounds, in redundancy, community development and so forth, does not appear to enter into the calculation.
There is also distortion because nuclear power is expanding its share of the market. It has a privileged position inside the public sector, with its debts being


written off. That is not fair, free market competition, regardless of whether one is pro or anti-nuclear. My position is well known.
At the core of the debate about THORP in the past week was the question of who would underwrite the £13 billion-worth of contracts. The answer is simple: the consumer will underwrite them. That is not a free market, but a guarantee of being able to exploit one's position in the market, where one cannot lose. Coal does not have that opportunity or advantage, but is squeezed out as a direct result.
It is true that gas-powered stations must be licensed, but the Government deliberately allowed a scramble to take place, because they wanted that distortion to arise. I have made my position clear. I do not support measures to reverse that process, but I believe that the distortion should not have been allowed to happen in that way in the first place. That puts some obligation on the Government to have a rethink.
The Minister made his point about the French interconnector. I have seen the supposed arguments, and I am not convinced by them. The interconnector was supposed to be a two-way, not a one-way, process, and that suggests that at least half the difference ought to be recoverable. The Government have never satisfactorily explained why not.
Although I have no expectations, the Minister and the Government ought to acknowledge that they have made a mess, and that they have created distortion in the marketplace, partly driven by malice, partly driven by strategy and partly driven by ideology. The Government have not come clean, and they have not been open or honest. If they had said, "We have made a calculated decision that the coal industry should contract to a certain level because it is too dominant within the electricity supply market, and we are creating a playing field to achieve that," it would have been honest. It might riot have been acceptable, but it would have been honest.
The Government have acted totally under the counter, and we have had to guess and second-guess their motives. I am sure that, whatever their motives, they are not in the national interest. The Government should think again.

Dr. Michael Clark: I am pleased to follow the hon. Member for Gordon (Mr. Bruce). Like him, I shall do my best to make a constructive speech because I believe that we should attempt to find a solution rather than go back over the past and try to attribute blame. My estimate is that there is as much anguish and disappointment among Conservative Members as there is among Opposition Members about the fact that we are not finding the market for coal that we expected three months ago and about the fact that there is still much to be done if we are to save the majority of the pits that we set out to save in March and April.
At the time of the White Paper, we were promised that the generators would be encouraged to sign contracts, which they were some distance away from signing then. That has now been done and in notes to hon. Members both National Power and PowerGen have let it be known that they have signed or are on the verge of signing five-year contracts. We have moved forward in that respect.
We were promised that there would be a dramatic reduction in imports of coal. With one or two minor exceptions, coal imports are negligible at the moment. So be it; they should have been negligible a long time ago. If they had been, we should not have had the stocks that we are now discussing. We were told that steps would be taken, albeit modest steps, to cut the amount of electricity coming from France through the link. Like the hon. Member for Gordon and others who have spoken this afternoon, I am disappointed that we have not made further progress on that. However, we may hear a little more about that from my hon. Friend the Minister.
We were also told that in the longer term there would be closer scrutiny of planning consents for opencast coaling and for combined cycle gas turbine stations. That is still long term. One hopes that the matter is being worked on and that the steps that need to be taken now so that long-term action will occur are being taken now, and that thought is being given to tighter controls and less ready planning consents for opencast coal and for gas-fired power stations. We were also told that there would not be retrospective change to planning consents that had been given for gas-fired power stations and that there would not be retrospective action against nuclear power stations or nuclear plans. Many hon. Members on both sides agreed that that was wise and proper.
Yet the fact remains that we have not sold any coal over and above what we would have sold if the White Paper had not been produced. We have to wonder why. We know that Nuclear Electric is doing better than it has done in the past and that it is taking a few extra per cent. of the market available. We can, if we like, blame the warm weather, but I suspect that the position would have been the same if we had had the coldest spring for 100 years. I believe that the reason for our present difficulties is largely that we have a record level of coal stocks. As the generators are now in the private sector, and as they want to reduce the financial burden of those stocks, they are less inclined to buy the coal that we should like them to purchase. They have obligations to their shareholdres to run the stocks down for financial reasons.
I intend to evaluate three areas with a view to finding a remedy for the current situation: first, the Government's role; secondly, British Coal's role; thirdly, the role of the generators. We all know that the privatisation of coal is at the end of a long chain of privatisation. As a result, there is little doubt that the coal industry has suffered, as all fair-minded people would accept. It would have been far better for the coal industry to be privatised before the electricity generating industry was privatised. It might have been even better if, when the electricity generating industry was privatised, it had been privatised with the coal contracts already in place. That would at least have been a consolation prize for the coal industry if it was to be privatised at the very end of the chain. That has not happened and there is no point in wishing to change the past. We cannot do that.
The fact remains that the coal industry was constrained in a number of ways because it was in the public sector. It was constrained in its working practices and in its investment, and it is only through lifting the coal industry out of the public sector and into the private sector that we can largely get rid of those constraints. Therefore, I urge my hon. Friend the Minister to press ahead with the privatisation of the coal industry as quickly as possible, even if that is not entirely acceptable to Opposition


Members, who perhaps would prefer the industry to be in the public sector. As the hon. Member for Gordon said, it is surely better that pits stay open and that the industry survives under different ownership than that the industry collapses and dies under public sector ownership, retained only as a matter of political principle and dogma. New ownership and new commitment will lead to new morale and new opportunities for the coal industry.
When my hon. Friend the Minister studies the privatisation package, he should consider the possibility of regional packages, with coal mines being sold off in regional groupings so that there is a commonality of interest within the area. That should also include selling off, with deep-mined coal, some of the opencast sites or some of the planning consents for opencast sites. That would make the package more attractive to a purchaser as it would give him the cheaper coal that comes from opencast mining in addition to some of the more expensive liabilities of deep-mined coal.
There are examples of the publicly owned British coal industry not taking the action that would almost certainly have been taken if the industry had been in the private sector. One example was when, a few weeks ago, British Coal announced that it had not been as cost conscious on the surface as it should have been. It decided to cut expenditure—and that, unfortunately, means job losses on the surface. There is considerable doubt as to whether British Coal has ever looked properly at manning levels on the surface. At the same time, it has looked always with a critical eye at manning levels and productivity underground.
The Government should point out to British Coal that, if it is to become the prime coal mining company of this country, it should not be importing 100,000 tonnes of coal from Poland to sell on the domestic market simply because British coal is not appropriate for the domestic market. Surely any private sector company would make sure that it was producing coal that was appropriate for the domestic market. Why is British Coal bringing 500,000 tonnes of Colombian coal into both the Thames and the Mersey? In total, that is the equivalent of probably one and a half pits' worth of coal. It is complacent of British Coal to continue to import coal for resale when it should be selling its own commodity.
If British Coal were in the private sector, it would take appropriate steps—as do many private sector companies —to ensure that there was a market for its commodity, even if that meant joint ventures with some of its customers. In the private sector, British Coal would have had joint ventures to ensure that clean coal technology was moved into a demonstration plant and that gasification was also available to make sure that more coal was sold. Those joint ventures would have been a useful way of doing that.
My second point concerns British Coal's dilemma. It does not know whether it represents British coal as a company or as a national industry. As a nationalised concern, there is no doubt that it takes the view that it is the guardian of both the company and the industry. But as an industry that is about to be privatised, British Coal is now beginning to look for the first time at its organisation. It is not as interested as it should be or as it used to be in the industry in general. That is why it has only belatedly

agreed to offer pits for sale. That is why it has allowed faces that are difficult to mine to deteriorate and has occasionally lost machinery at those faces without making adequate efforts to pull that machinery out. I understand that several million pounds' worth of machinery has been lost at both Markham and Rossington.
British Coal is also removing face machinery, sometimes justifiably to put into other pits and into other faces where it is needed, but sometimes at a face that is working, for scrap. It would be far better if that machinery were left in place and offered for sale with the pit to some future operator. But British Coal is not absolutely certain that it wants those pits to continue, because they will compete against the hard core of pits that the company will be keeping for itself. Asking British Coal to sell off pits in good working order is not like asking turkeys to vote for Christmas—it is like asking them to organise Christmas, and British Coal certainly does not intend to do that.
My final point concerns generators. Ideally for the British coal industry, there would be private coal mines supplying generators that were not only private but plentiful, as that would do away with the duopoly that exists at present. There is an excess of generating capacity, and it is said that that excess is being offered for sale. But, as I said in an intervention in the speech of my right hon. Friend the Minister, the price that is being asked for the excess capacity in the generating industry is not the written down value of the generator or its true asset value but a price equivalent to the cost of building replacement modern capacity of the same type as Drax. In other words, the generators are prepared to sell off surplus generating capacity only if they can obtain a price equivalent to the price that they have to pay to replace it with modern engineering.
That is not a real world situation. The generators occupy a privileged position: they know that they now belong to the private sector, but they still enjoy the benefits of the duopoly that resulted from their transition from state ownership to the private sector. They are retaining assets built and transferred to them by the state—assets which should still be used for the general benefit of this country and not as some pawn in a game played by the generators.
It is true that the closure of power stations must be notified to the regulator and that the reasons for that closure must be stated so that they can be examined, but I believe that, in addition to that, the regulator should be considering carefully the generators' explanations as to why they are not offering the stations for sale at a reasonable price. Third parties seeking to purchase a power station from the generators should also have the opportunity to make representations to the regulator, and the regulator should be obliged to see whether the existing owner is trying to sell at an unreasonably high price.
I welcome the statement made by Professor Littlechild in March this year, in which he asked for more time between the announcement of the closure of a power station and the closure itself. It is gratifying to know that National Power is now acting on that recommendation by giving adequate notice of closure so that buyers may be able to come on the scene. I hope that others will follow the example set by National Power and take note of Professor Littlechild's request.
I am not seeking artificial markets or permanent subsidies for coal. I am not advocating the preferential


purchasing of coal. Nor am I seeking Government-inspired or Government-enforced contracts. I am seeking equal opportunity for coal as a fuel; a free market for coal and, in the absence of that, more intervention by the regulator until the free market can be truly established; diversity rather than a duopoly of customers; proper acceptance of the importance of coal in this country; full recognition of the contribution that coal miners make to our economy; and an acknowledgement that the coal industry still has an important role to play long into the future.

Several hon. Members: rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I remind the House that between 7 pm and 9 pm there is a 10-minute limit on speeches.

Mr. Martin Redmond: As it is not 7 pm, I think that I shall be in order if take a bit longer.
If logic and reason were to prevail, the Labour party would have won the argument many years ago. Regrettably, the irrational arguments and the luddite approach of Tory Members have led to the demise of the industry.
The problems have been with the chairman of British Coal, its industrial relations officer, Mr. Kevin Hunt, the President of the Board of Trade, and the Minister for Energy. I have to say that they must be as thick as two short planks not to accept our reasoned arguments.
Following the debate on the White Paper, we wrote to the President of the Board of Trade, listing eight points. Rossington pit which is in my constituency, was one of those to be mothballed. We asked him to give an assurance on those eight points. He passed it on to the Minister for Energy, who passed it to the chairman of British Coal, because he said that it was an operational matter.
Correspondence has passed between the chairman of British Coal and myself, but none of the eight points were answered. If the Minister were to listen instead of prattling on to his Parliamentary Private Secretary it might do the industry some good: he has done nothing so far. The eight points are vital to a mothballed pit. The coal Minister has had them once but I will send them again tomorrow.
I do not want to take up too much time, but it is vital for Rossington. British Coal is taking steps to remove essential machinery that will make Rossington pit inoperative. The Minister should get off his backside, go to British Coal and do the job for which he is paid, instead of sitting back like Pontius Pilate.
The national interest is crucial, but one would not think so from the policy decisions made by the Government. The balance of payments will be affected, but that will not be the concern of the Government as they will not be in power after the next election. We cannot have a long-term energy policy if we allow market forces to prevail. We are allowing market forces to prevail and then complaining about this policy or that policy.
The report of the Trade and Industry Select Committee was a waste of time. The Government had no intention of taking any notice whatever of any of its recommendations. They intended to hold back the tide and groundswell of public opinion until it had abated. They are a bit like King Canute. Unless we can jiggle or marshal market forces, there is no way that we shall have a suitable energy policy.
I received a letter from National Power, in which it talks about the amount of coal that it is taking, but that is declining. I take what the generators say with a pinch of salt. They are in it for profit, not the national interest and in days gone by the Queen would have sent her troops to behead people for committing such treasonable acts against the country.
Opposition is coming not only from the National Union of Mineworkers, the Labour party or the general public but from the Association of British Mining Equipment Companies, which cannot be described as a supporter of the Labour party or the NUM. It says:
Should the 12 pits earmarked for rescue in the White Paper not now be saved, we will be back where we started after the initial announcement last October, and the Government's review will have been a waste of time and effort.
Of course, all the consultation that the Government go through is nothing but a sham—a public exercise to take the sting out of the matter and to pretend that they will take note of the consultation. The Government's arrogance is such that they will take notice of nothing—nothing but their own irrational ideas. That is a tragedy.
I regret that the Government did not get their troops in this evening because we would have heard the usual loudmouthing, shouting and bawling about an industry that they know nowt about. They have big gobs but no ears. If they opened their ears, they would certainly hear a logical, sound and responsible argument from Labour Members. I do not want anybody to say that Tory Members are interested.
The so-called rebels have been mentioned. One or two of them joined us in the Lobby last time, and one or two talked about it but jibbed at the last moment. I am very concerned about the rebels because I am sure that they will survive any argument like a snowflake in hell. I listened to the hon. Member for Rochford (Dr. Clark) put his logical argument. When he was Chairman of the Committee that considered the Associated British Ports (No.2) Bill, he vetoed every amendment tabled by members of the Committee. Why? Because of his vested interest with one of the subsidiaries.

Dr. Michael Clark: On a point of order, Mr. Deputy Speaker. Not only is that dishonourable, but it is absolutely untrue. I had no interest with any subsidiary that made representations before that Committee. If I had, I would have declared it in the Register of Members' Interests and would have declined to sit as Chairman.

Mr. Deputy Speaker: The hon. Member for Don Valley (Mr. Redmond) will have heard that assurance.

Mr. Redmond: I understand and I will withdraw the remark if it is untrue, but the hon. Gentleman vetoed every amendment so as to stop the Associated British Ports (No. 2) Bill from being debated on the Floor of the House. I ask myself why. He has declared his interest in British Gas. That may be understandable because British Gas was involved in the arguments at about that time. We need to ensure that hon. Members speak honourably and have the interests not only of the coal industry but of the country at heart. I do not mind people trying to kid people, but at least they should be honest and tell people exactly where they stand.
I do not think that there will be many Tory rebels this evening. Will it be another case of catch as catch can? I do not think that sufficient Conservative Members will


support the Labour motion, but if they are concerned about the national interest and the welfare of this country in the 21st century and do not want us to be held to ransom by the coal barons of the world they will certainly support our motion this evening.

Mr. Richard Alexander: On behalf of my hon. Friend the Member for Rochford (Dr. Clark), I totally disagree with the suggestion of the hon. Member for Don Valley (Mr. Redmond) that he was dishonest or dishonourable in any of his conduct in relation to the Associated British Ports (No. 2) Bill. It was a disgraceful comment, which I feel that the hon. Gentleman should have withdrawn more fully.
I am one of the Government's most loyal supporters. It gives me no great pleasure to criticise their policies on the coal industry, and to underline the disastrous consequences of what has been done over the past 12 months for north Nottinghamshire in general, and my constituency in particular.
At the end of January, the Select Committee recommended ways in which to obtain a greater market for coal. The White Paper, unfortunately, rejected many of the Select Committee's recommendations, but the Government reprieved 12 of the 31 pits on the original hit list. Some of my hon. Friends believed that that did not ensure a long-term future for the coal industry, but our advice on what should be done was not accepted.
Since the White Paper, two pits have closed, another is likely to close and there is a strong likelihood that others will follow. In my county, four pits have closed since March, and Rufford will close before the end of the year. That represents a loss of 4,000 jobs; it is a desperately serious blow for Nottinghamshire—particularly north Nottinghamshire—and the associated businesses and communities that depend on the coal industry.
The debate is timely. I respect my right hon. Friend the Secretary of State, but I had hoped for a more positive indication about the future than he was able to give us. The Government must not just wring their hands and say that there is no market for coal. The coal industry operates in a market that is rigged against it, and only the Government can unlock the inbuilt disadvantages under which the industry currently operates.
During the last debate, we aired the issues of the French connection, the levies and the ease with which the gas industry can start up its gas turbine power stations. I will not go into all that again. Meanwhile, however, our indigenous industry, which has reserves for hundreds of years, is slowly bleeding to death. It must be folly to stand by and see the pits that contain those reserves close one by one, despite past investment of hundreds of millions of pounds, the new technology and the pride that miners take today in the achievements of their pits. We have highly skilled and professional mine workers who take a pride in their jobs.
Even as the debate proceeds, thousands of miners are being put on the dole, with thousands more of their dependants living with little hope for years to come. Miners have worked hard to bring their costs down. Their productivity has never been higher. All they ask now is an opportunity to compete on equal terms with alternative

sources of energy, and they are not getting that at the moment. The miners are seeking not higher subsidies or larger redundancy packages, but a signal from the Government that they have an equal place in the energy market with competitor fuels.
The closures are happening not because coal is uneconomic, but because it does not have that equal opportunity. As the Coalfield Communities Campaign urges all hon. Members in its most recent briefing for this debate, the Government must reappraise the situation in the energy market in the light of what has happened since last March, and I urge that course on the Government.
Last month, the Department of Trade and Industry set up a Nottinghamshire and Derbyshire coalfield regeneration partnership, whose object is to use European funds to attract inward investment into the coalfield areas. I was astonished to learn that the only local authority to be represented on that body will be the county council. Mansfield district council and Newark and Sherwood district council, which represent the communities most affected by the closures, will have no voice on it. The county council will spend the money, but those at the sharp end are excluded from membership.
That has created astonishment and resentment in the communities of north Nottinghamshire. The fact that the districts most affected by the closures are not represented on that body is another own goal by the Department of Trade and Industry. It does nothing to assuage the feeling of resentment and uncertainty caused by the pit closures in those communities.
I ask the Government to look at what has happened at the pits which have closed or are about to be closed—or those which, like Bevercotes in my constituency, are laughingly described as being "mothballed". In October, my right hon. Friend the President of the Board of Trade gave a specific pledge that the pits that British Coal did not want would be made genuinely available to the private sector. I accept the honesty and integrity with which he made that statement, but since then—as hon. Members have said—equipment has been dismantled and removed. Moreover, two months after the White Paper, British Coal had still not advertised the pits for licence to the private sector. Only within the last couple of weeks has it done so.
British Coal must know, as every hon. Member in the debate knows, that, once coaling ceases, pits deteriorate and become less attractive. Equipment that has been expensively installed in such pits must not be taken out. When I took this matter up with the chairman of British Coal, he informed me:
it is not our intention to offer collieries as going concerns.
There we have it. If British Coal is not going to mine the coal, no one else is going to mine it as a going concern, and pits will be run down to an unacceptable level. Surely that is not what the President of the Board of Trade had in mind when he said that those pits would be genuinely made available to the private sector.
I fully understand British Coal's wanting to recover and retain its assets, but it must be remembered that these are also public assets, and the Government and Treasury ought to want those assets transferred to the best advantage of the taxpayer. The taxpayer has a right to make sure that otherwise good working pits should not be vandalised to the point of uselessness to any purchaser.
Private operators have a part to play in the future. They should be encouraged to do so, and the Government and British Coal should be much more closely involved in


ensuring that it is done. I seriously urge the Government to do that, in the interests of the much more prosperous coal industry that we all seek for the future.

Mr. Richard Caborn: This afternoon the House has witnessed one of the most complacent speeches from a Minister that I have heard in the past 10 years. The way in which he dealt with an issue that is extremely important for the nation was an abuse of the Dispatch Box. In March, the Government produced a White Paper of 150 pages, which we debated four days later. Equally, it is an abuse of the House that today's debate has to be held on an Opposition day—we have had to use an Opposition day to bring a Select Committee report and recommendations before the House for them to be voted on. The Government requested the report but could not find the time—indeed, denied the House the time —to debate it.
The Secretary of State's speech was a reflection of the Government's bankrupt policies on the mining and energy industries. When the industrialists who have been watching—let alone the mining communities and the miners themselves—see how we treat an extremely important industry, they will know that they have a great deal to worry about, not just with regard to the mining industry.
Despite what the Government would like us to believe, we are not deciding the fate of individual pits; we are deciding whether we will have a mining industry at all and what are the long-term implications for the nation's energy supply. As the hon. Member for Rochford (Dr. Clark) said, unless the House accepts a package of treasures similar to that proposed by the Select Committee on Trade and Industry, of the pits that are on the reprieved list, one pit a month will close. In addition, the figures do not stack up—we shall have only 15 pits operating in two or three years' time. The Secretary of State, however, could only put up his hands and say, "We surrender; it is the market, and there is no alternative." He has clearly swallowed the White Paper's argument hook, line and sinker.
The White Paper states that the need for generating stations, capacity, choice of fuel, type of plant, and so on are commercial matters for the market to decide. I challenge the Government: has not the nation got an interest, a view or a say? We are considering the future of one of the nation's strategic industries, an industry on which all other economic activity is built, but we are allowing the nation little say.
Energy is an industry that consumes the nation's natural resources and pollutes our environment. That is reason enough for the issue to be a matter for all of us. In the final analysis, it is the taxpayer who picks up the bill for every lost job. How can the Government argue that the industry should have carte blanche when it comes to writing out bills that the nation must pay? How can any Secretary of State, especially any Secretary of State for Employment worthy of the name, defend a decision that will cost the nation 100,000 jobs?
The Secretary of State told us that the President of the Board of Trade was right to state on 13 October 1992 that 31 pits should close. He said that the Government were right to plough on regardless in March and to substitute

—which is all that they have done—the prolonged pain of phased closures for the big bang of one mass redundancy. Twenty-one pits have now closed.
Setting aside the fact that it cannot be right to abandon 300 years' worth of valuable coal reserves and that it cannot be right to close pits that produce the cheapest deep-mined coal in Europe and spend millions of pounds making people redundant, is it not lunacy to import coal while paying our miners the dole? Is it not lunacy to allow the French to use the interconnector to export their power, as has been amply proved this afternoon? Is it not lunacy to close established deep-mined pits, to open new, environmentally damaging opencast mines and to abandon cheap coal-fired electricity in favour of more expensive gas generation?
I wonder which report I signed, because the distortions that I have heard this afternoon about the cheapness of gas-fired electricity as opposed to coal-fired electricity are not justified by the report to which I added my signature. The cheapest electricity is produced by coal—that is plainly stated in the report. The second cheapest is gas generated, the third is nuclear-generated, and the fourth comes from the French interconnector.

Mr. Alan Duncan: rose—

Mr. Caborn: I shall not give way, as I have only 10 minutes in which to speak. The cheapness of coal has been well documented, but more important is the way in which the Government are now allowing 25 to 30 per cent. of the industry to be disrupted in a five-year period; over five years they are allowing us to move from no electricity being gas generated to between 25 and 35 per cent. being gas generated. The energy industry is a long-term industry and such a move is very disruptive. That is at the centre of the Select Committee's argument.
Central to the Select Committee's inquiry was the very question that the Secretary of State asked: is there a larger market for coal? We considered the issue from a sound economic and commercial perspective and came up with the answer that yes, there is a larger market for coal.

Mr. Duncan: Where?

Mr. Caborn: A larger market for coal could be found if the Select Committee's 39 recommendations were followed. The inquiry was conducted in the open, not behind closed doors. All the evidence was made public, on television and on radio. The difference between the Select Committee and the Government was that the Select Committee approached its task with an open mind. We did not try to defend the decision made on 13 October 1992 —which, unfortunately, is what the Government have done. They have tried to defend the indefensible.
The President of the Board of Trade said, in his opening remarks to the Select Committee, that he was prepared to introduce legislation to widen the market for coal. Instead of doing so, when it came to the final decision, he ducked it. There is only one actor on the energy stage who can take the necessary action; it is not British Coal, PowerGen, National Power or the nuclear industry but the Government. Only they can rectify the discrepancies in the model of privatisation for the electricity industry. That is the only way in which we shall have a sustainable coal and mining industry.

Mr. Richards: Will the hon. Gentleman give way?

Mr. Caborn: No. It is unfortunate that the White Paper did not deal with the core issue of the 39 recommendations, which was to widen the market for coal.

Mr. Duncan: Where?

Mr. Caborn: If the hon. Gentleman is so illiterate that he cannot read the Select Committee's report, he should not be here. It is all very well for the Minister for Energy to poke fun—we have seen a disgraceful amount of that today from Conservative Members. In March, the Government denied the Select Committee a reasonable answer to the 39 recommendations, and they have done so again, but the judgment will be made not in the House but outside. That judgment is coming.
Unless there is a response to the key issue in the 39 recommendation's, which is to open the market for coal —which only the Government can do—I predict that, in the coming two to three years, the number of pits will be reduced to 14. That will be a reduction from the 130 pits and 150,000 miners in 1985 to 14 or 15 pits and about 15,000 miners. The Government will have sold out the nation. It is probably not the Government but generations to come who will pay the price.

Mrs. Elizabeth Peacock: The statement that my right hon. Friend the President of the Board of Trade made last October was totally rejected by a huge number of people who had no contact with mining or manufacturing and very little contact with coal itself. They totally rejected what he had to say. However, I am very sad that my right hon. Friend the President is not with us today and I hope that the strong pressure which many of us put on him over the past few months did not contribute to his recent illness. We all wish him well.
Many people did not accept what the Government said last October. I do not want to return to those arguments, because we have been over them time after time. However, I still do not believe that the Government took adequate steps to ensure a long-term strategy and future for British Coal at that time. We should have taken steps to control the French interconnector. We should have ensured that we could sell British electricity through France to southern Europe where there are purchasers. We could have slowed down the dash for gas. I was not looking for anyone else to be put out of work, but I cannot see why all the jobs must be lost in one industry and connecting industries.
I am sure that all hon. Members have received letters from the Association of British Mining Equipment Companies. A constituent of mine who is involved in that association wrote to tell me:
The implications for our industry will be the loss of the major part of our domestic market".
We are all aware that any manufacturing industry requires a strong home market on which to export. Members of the association to which I have referred will suffer.
We did not do those things back in October and we now have a reducing British market for our coal. We have generators with large stocks because we are using more power from gas. Obviously, those generators must decide what to do with those stockpiles. We have overproduction. As we have already heard, mines are more efficient than they have ever been and they produce more coal, more cheaply than ever before. There is no argument about that. However, via British Coal, we are using taxpayers' money

to make miners redundant and we are sealing underground millions of pounds' worth of equipment for which the taxpayers have paid.
We are now in an era of industrial vandalism, the likes of which we have not seen since there were Luddites in Yorkshire. It is true to say that those Luddites did nothing like British Coal is allowed to do now. That vandalism is being perpetrated by British Coal. When business men are willing to consider ways of using the assets for the benefit of United Kingdom plc and all those who want to work in the industry, why cannot the Government and the coal industry help them to go forward and make the best use of those assets to everyone's advantage?
Of course, there is a strong case for reshaping the coal industry. The sooner it is reshaped, the better. It has to be reshaped now so that it may survive and prosper in the future. If it does not, we will not have a strong mining industry. I am aware that my hon. Friend the Minister for Energy has often said that he sees a future for the coal industry.
I am not against privatisation, because I believe that privatisation holds the best solution for the future of the industry. However, we cannot and must not expect the present British Coal organisation to be the vehicle for privatisation. Those running the business are too entrenched, and they have undoubtedly already shown that they are afraid of real competition in the industry.
If the Government want to introduce legislation to privatise the coal industry, I will support my hon. Friend the Minister for Energy, but only on the basis that the present British Coal organisation is broken up into at least three clearly separate, competing coal mining and marketing companies and that other industrial investors are authorised to operate coal mining at other pits on an equitable commercial basis.
Only through that kind of action will the Government ever see a return on the £7·5 billion which has been invested since 1979 in the coal industry for new coal faces and equipment. There is no argument about that figure. However, two thirds of those mines are now closed or under threat. That is really taxpayers' money down the drain. The value of that investment at 1993 values is £10 billion. That is a huge amount of money. Many other industries would he thriving if they had received that level of investment over many years.
Some £500 million has been spent in the Yorkshire area of Barnsley in the past 10 years to reconstruct the industry totally. All that has now gone. All the mines are closed, including the £20 million washing plant at South Kirby and the larger washing plant at Woolley. The recent blowing up of the Woolley washing plant was a terrible act of vandalism.
I have some very pertinent questions for my hon. Friend the Minister for Energy. When he replies to them later, I will decide what action to take in respect of the debate. However, I must tell my hon. Friend that I could not possibly support the Government, and I am sure that he would not expect me to do so given the stance that I have taken over the past few months. It may be helpful if my hon. Friend were to answer my questions.
Will my hon. Friend tell the House and the country how much we are paying for electricity from the French interconnector? I recall that the Select Committee on Trade and Industry found that we were paying 3·38p per unit on base load. I understand that the regional electricity


companies have recently negotiated a reduction from 2·8p to 2·6p on base load. How expensive is our French electricity?
Can my hon. Friend confirm that we have renegotiated a similar reduction for our French electricity? I trust that we are not paying a 30 per cent. premium to the French and closing our mines, paying redundancy and scrapping machinery which has cost the taxpayers of this country many millions of pounds.
Perhaps my hon. Friend the Minister will say a word about coal imports. We are now importing 100,000 tonnes of house coal—not cheap power station coal. House coal can be, and was, mined in Yorkshire. It should have continued to be mined there. The 0·5 million tonnes arriving via the Thames could be supplied by British mines. As we already know, 300,000 tonnes are to be imported by British Coal for a processor on Merseyside via PowerGen's Fiddler's Ferry terminal. That could be Yorkshire coal. Fiddler's Ferry was built by PowerGen for power station coal, not for high-grade processor coal at the expense of mines in this country. It is nonsense to allow that to happen.
What about the mines for licence? I am sure that my right hon. Friend the Secretary of State for Employment was sincere about British Coal making such mines available to potential operators. However, I suggest that British Coal is afraid of competition. It wants to ensure that it has a continuing monopoly. Surely a Conservative Government would not want to see an on-going coal monopoly.
Is British Coal management simply looking forward to privatisation and the golden spectre of share options in a privatised monopoly? Anyone wanting to consider licensing one of the mines destined for closure would experience great difficulty. Every obstacle is put in the way of people wishing to license such a mine. There is no prospectus and no description and there are no figures. There is nothing but a map reference. I am sure that we would not all go on a treasure hunt with a map reference. Anyone seeking to dispose of assets or any business would provide proper information for those considering licensing or purchasing.
British Coal also demands that a letter is signed relieving the organisation of any liability if any information provided is inaccurate. I cannot see why British Coal does that because it does not provide any information. It is ensuring that nothing is inaccurate by providing no information. What a way to sell our assets, and particularly our national assets. That is rather like buying a second-hand car from Arthur Daley with the additional disadvantage of being blindfolded so that one really cannot see what one is purchasing. That is no way to progress.
We want to see a future for our coal mining industry. Many of us want to see a private coal mining industry as opposed to one that is closed down. However, we want it to have the safeguards that any mining industry should have because safety is very important.
I suggest that some, if not many, of the mines could have a future for the mining of specialist coals for niche markets—direct to processors and the house coal market. We all agree that that is much smaller that it was several years ago; nevertheless, it is still there.
The Government should ensure that closed mines are removed from British Coal control and placed in a separate organisation so that their potential can be fully

and freely investigated by companies that wish to compete with British Coal and with each other. That urgent matter needs urgent attention.

Mr. Eric Clarke: I also regret that the President of the Board of Trade is not present. I wish him well. I should have preferred to make my criticisms to his face rather than from afar. I should like to know where his hon. Friends are. Are they at his bedside? Very few of them are present. Even the Minister is not listening to me. Is this not a serious business? Where are they?
Throughout my lifetime, headlines have always read "The coal industry is in crisis". If we continue with the Government's policies, there will soon be no coal industry in which to have a crisis. It is a very serious condemnation of the Government's policies that this is happening. I blame the Government for what is happening. I am just as disappointed as the hon. Member for Gordon (Mr. Bruce) in the Minister's antics. I want to treat the matter very seriously. I come from a mining background. The Secretary of State clowned around and used statistics and a host of other items that were totally irrelevant to the crisis that the people in the Public Gallery and elsewhere have to face. [Interruption.] Okay.
The Government's formula for the closure of economically viable collieries is pure propaganda. Their subsidy and help are to no avail. After the debate—I emphasise that—The People exposed how the miners' staff superannuation fund was dipped into to subsidise redundancies to the tune of more than £400 million. That was never mentioned on the Floor of the House.

Mr. Eggar: indicated dissent.

Mr. Clarke: The Minister may shake his head if he wishes.
There was a total lack of effort in encouraging generating companies to buy British and secure a market for coal. That is also a condemnation of the Government. The Pontius Pilate attitude has been mentioned in respect of the energy market, but a subsidy of £1·3 billion a year is built in for nuclear power. There is no relaxing of attitudes in respect of the argument for the extension of the life of Magnox power stations—another recommendation in the document that is being bandied around.
Will Magnox stations be closed? The $64,000 question is, what are the Government going to do with those stations? How much will it cost to phase them out? We would then see the real cost of nuclear power. Will the people of Britain again foot the bill for those stations, or will we recommission them again and subsidise them until another Government take them over in the near future? There are no market forces for nuclear power, but there are market forces for the coal industry.
I am sure that all hon. Members have received a letter from the Association of British Mining Equipment Companies. I make a plea on its behalf. It represents the finest mining engineering companies in the world, which sell their products to China, for example, and other countries. The association says that it needs an indigenous industry for research and development—we have used that argument before—and for customers and jobs. The Government do not seem to care a tuppeny hoot about the mining industry, but there is a knock-on effect on skilled labour, jobs and important export potential.
Ignoring the Select Committee's reasonable, sensible options was the road to closure. The Government's reply was aimed to con the public or to cool them down. They obviously conned their Back-Bench rebels. That was what really mattered to the Government; that was their motivation. That is the conclusion which any logical person will come to. Who will pay for that? It will be the miners and mining communities. The people of this country will pay the highest price for the closures and the "Heseltine folly".
Miners do not talk behind people's backs—we do not talk about people who are ill—but the President of the Board of Trade carries joint responsibility with his colleagues and everyone who voted to support this policy. They are guilty.
There is an opportunity. Conservative Members have said that they cannot change matters. They can change them. The formula that the Government put to the country as a panacea is not working. They can change matters because they can support us in voting to prove that the people of Britain will give their children a better inheritance, that miners will not be denied the right to work, and that common sense, decency and democracy will prevail. Will hon. Members please use their common sense, take off their blinkers and support the Opposition?

Mr. Rod Richards: The history of the industrial revolution is that the organisations and economies that embraced technological change and took advantage of it flourished and went from strength to strength. Those that resisted change and introduced subsidies to prop up obsolete products and practices have declined and, as in the case of eastern Europe, ruined their economies.
There is no escaping the fact that, over the past 20 years, we have witnessed a fundamental shift from heavy industry towards a manufacturing and technology-based society, partly because we developed the new technologies ourselves and party because of the emergence of developing industrialised countries in south America and the far east, with their low-wage labour inputs. In the light of that new competition, it would be extremely naive of us to think that we can sustain markets when our production costs are up to 10 times more than those of our competitors.
The steel industry, for example, was the victim of a grossly ambitious plan, encouraged by successive Governments, which resulted in overcapacity, overproduction, big losses and huge subsidies. Billions of pounds of taxpayers' money was spent to produce steel that nobody wanted. Even with the massive amount of money that was poured into our steel industry, we could not compete with world prices, yet, despite that, people still argued for the industry's retention.
Thankfully, under this Government, the waste of resources was ended. We now have a steel industry which is a leaner operation which has been allowed to build on its strengths. Fifteen years ago, it employed 200,000 people. Now, it has a dedicated work force of about 45,000 and it has reached new levels of productivity and excellence.
Nevertheless, it must be recognised that if an industry with improved practices still cannot compete, we must let it go. The Japanese shipbuilding industry used to be one of the greatest in the world, but now barely a ship is built in its waters. The Japanese recognised at an early stage that the costs of that labour-intensive industry were becoming unrealistic and unsustainable as its neighbours such as Korea started to develop their own docks. Japan did not fight that logical progression. Instead, it chose to diversify its industrial and manufacturing base into new and developing sectors where it could once again be a market leader.
The past few months have seen a debate about the future of the British coal industry rage at all levels. [Interruption.] It has not escaped my notice, Mr. Deputy Speaker, that the hon. Member for Mansfield (Mr. Meale) is trying to interfere with your judgment. However, I shall ignore that for the moment.

Mr. Deputy Speaker: Order. I assure the hon. Gentleman and the House that no one interferes with my judgment when I am in the Chair.

Mr. Richards: I apologise, Mr. Deputy Speaker. It was certainly not meant to reflect on your integrity.
Newspaper headlines have bemoaned the demise of king coal and how it spells doom for the United Kingdom. They talk of the scaling down of the coal industry as a new and vicious phenomenon dreamt up on a whim. Of course, that could not be further from the truth. From a peak of employing 1·25 million miners in 3,300 mines at the end of the first world war, the coal industry has undergone 75 years of continued retraction.
The decline has occurred under both political parties. Between 1964 and 1970, the then Labour Government, recognising the over-production and over-capacity of the coal mining industry, closed down some 288 pits with a loss of 186,000 jobs. Furthermore, the United Kingdom has not been alone in scaling down its coal industry. The number of miners in Europe has dropped from 1·5 million in the 1950s to a present total of under 200,000. Belgium closed its last pit in 1992 and France envisages the loss of its remaining 20,000 mining jobs by the year 2005.
It is an inescapable truth that one cannot continue producing something that one cannot sell. The market for coal has been in decline for three generations and we have all had a hand in its demise, including Labour Members. Over the past 50 years, millions of individuals have made the crucial decision not to burn coal in their homes. Since 1947, domestic use in Britain has fallen from 37 million tonnes to just over 5 million tonnes. Of course, the environment is better for it. Having said that, I have no doubt that coal has a part to play in the future generation of electricity in the United Kingdom.
The Point of Ayr colliery near my constituency is a good example of a mine which is competitive, in which there has been new technology and new investment and, most importantly and crucially, which has a market for its coal. I grew up in the coal mining valleys of south Wales. I am only too aware that mining is a dirty, difficult and dangerous task. I cannot help but think that many of those people who are outraged by the recent and necessary closure of mines have perhaps an over-romantic vision of what coal mining entails.
I know many miners who have health problems—dust on their lungs, shortness of breath, eyesight permanently


damaged by working in low light and hearing impaired by industrial noise. [Laughter.] I am fascinated that Labour Members find that amusing. I do not find it amusing, because I know miners who suffer from those problems. All the miners whom I know can recall a colleague who has either been killed or seriously injured underground.
What has happened to the 1·25 million miners who have left the coal face in the past 80 years? The answer is that the industrial revolution has provided them with new opportunities to make a living.

Mr. David Hanson: Will the hon. Gentleman give way?

Mr. Richards: Labour Members voted against those opportunities and I shall give some examples. The Government intend to spend £160 million to build a barrage in Cardiff to develop that city. It is the greatest development in any city in Europe and will create tens of thousands of jobs. Labour Members, including the hon. Member for Cardiff, West (Mr. Morgan) voted against that development.
The Labour party also voted against the White Paper on coal. That White Paper will lead to the development of Connah's Quay power station and will create some 3,000 jobs. The Labour party, including the hon. Members for Delyn (Mr. Hanson) and for Alyn and Deeside (Mr. Jones), voted against that White Paper and, therefore, against those jobs. When I asked the hon. Member for Livingston (Mr. Cook) whether he was for or against the development of the Connah's Quay power station, all he could say was that he had nothing against the burning of sour gas. He did not say firmly that he was for that power station.
The once dirty and smoke-filled mining valleys of south Wales, which relied almost entirely on coal mining to provide employment, are now the silicon valleys of the United Kingdom. The demise of the traditional industry did not spell the end of the communities in that region but marked a new beginning—a new chapter—in the industrial revolution. New investment has been flowing into Wales—

Mr. Deputy Speaker: Order.

Mr. William O'Brien: I have listened to the debate from the beginning. It has been made plain today that the hon. Members for Clwyd, North-West (Mr. Richards) and for Leeds, North-West (Dr. Hampson), and the Secretary of State, know nothing about mining. The hon. Member for Clwyd, North-West talked about everything, including Japanese shipbuilding, the liquorice works and everything else, but not the mining industry. He demonstrated beyond a shadow of doubt that he knows nothing about mining. The Minister knows little about the mining industry.
We are in the present position because those who are dealing with the destiny and future of miners and mining communities, and the nation in general, know little about the mining industry. The hon. Member for Leeds, North-West talked about the necessity to import coal, but omitted to explain about the dumping of coal in the United Kingdom at the low prices at which it is produced in the producing countries. One of the problems that miners and

mining communities face is that they are being used by this Government and Governments abroad for the dumping of coal in the United Kingdom.
Recently, the journal published by National Power reported that it had introduced the first load of coal at the Royal Portbury dock in Bristol:
The first cargo of coal has arrived at the new bulk handling terminal which has been developed by National Power. The 43,000 tonnes cargo from the United States via Amsterdam arrived on board the MV Ascension. It took three days to unload.
In addition to the problem of dumping coal in the United Kingdom, we are experiencing a higher deficit in the balance of payments than ever before. The Minister and the Secretary of State are allowing coal to be dumped in the United Kingdom, at the expense of miners and their families.
The Secretary of State quoted many figures for the output per man per shift. However, his figures related to output per man per shift for men underground: he was talking about face workers, not the total industry for the periods for which he was making comparisons. It was totally unfair of him to mislead the House and the country by quoting figures that are grossly incorrect. Many of the points made by the Secretary of State were totally inadequate, totally irrelevant and against the best interests of the mining industry in general.
The mining industry is my prime concern, because, like many other Labour Members, I worked in the pits until I came to Parliament. We spent most of our working lives in the pits, and looking after the interests of the miners and the families. We often depended on the mining industry for our living. Because of the attitude and policies of the Government, we are now seeing the demise of the mining industry. They have no regard to what is happening in the industry.
The Secretary of State spoke about British Coal Enterprise Ltd. Anyone who asks how many jobs that organisation has created in his constituency, however, cannot get a firm answer, because many of those jobs are just myths.
The remaining colliery in my constituency, Sharlston —in which I, too, worked—closed after the announcement by the President of the Board of Trade in February. In addition to that pit closing, another factory shut within the same period, and a further 1,300 jobs were lost. Within a few weeks, more than 2,000 jobs were lost from my constituency.
When we ask the Government what action they will take to help those areas to generate jobs, there is little response from anyone—from the Minister responsible for mining or from those in the Departments of Trade and Industry and of the Environment. They have given little support to my constituency and other similar regions in their attempts to generate job opportunities.
Miners have always played their part in sustaining our economy. Reference has been made to the industrial revolution, but we need not go back that far. When the country was at war, the miners played their part in the war effort by ensuring that energy was provided.
My hon. Friends on the Labour Benches may recall that, when the five-day week was brought in, the Government requested miners to produce more coal. Those miners gave up their Saturdays to produce that extra coal to meet that Government demand. No one can say that the miners have not produced coal or played their


full part in sustaining our economy. The Government's rewards to the miners and their communities for their efforts are extremely poor.
The Secretary of State referred to a report on output figures of the past eight years. That report revealed that output per man shift for every person working in that industry had increased in eight years from 2·5 tonnes to more than 8 tonnes. I challenge the hon. Member for Clwyd, North-West to name any other industry that can match the results achieved in the past few years by the effort and hard work of the miners.

Mr. Richards: rose—

Mr. O'Brien: Sit down. The hon. Gentleman would not give way to my colleague, so I will treat him in the same way.
It is obvious that the miners have given their all in their efforts to meet the requests of Governments. I am proud to belong to the mining fraternity and community. It is an industry worth fighting for, and that is why this debate appears on the Order Paper, at the initiative of the Labour party.
We should defend the mining industry, and the Government should answer for their actions towards it.

Mr. Nicholas Winterton: Will the hon. Gentleman give way?

Mr. O'Brien: I am sorry, but I have little time left, and there is a lot to be said.
I could say a great deal in support of the mining industry and miners' families, in addition to the points raised by my hon. Friends. Because time is short, and because so many other hon. Members want to speak, I shall dwell on my pit, Sharlston, which closed speedily after the President of the Board of Trade made his announcement in February.
I said then, and I repeat now, that the men of Sharlston and their families were treated shabbily by the Government and by British Coal. That pit had a proud record of producing coal: it broke its own productivity record year after year. The work force were second to none in terms of output.

Mr. Alan Duncan: I wish to make a few observations, having watched the debate develop in the past months.
One of the advantages of the parliamentary system in which we play our part is that no one is immune to the letters received directly from his constituents. All of us recall the mountain of letters that we received when the first announcement about pit closures was made last year.
I hope that the House will accept that I am trying to address the issue honestly when I say that I was well aware at the time that a raw nerve had been struck by the initial announcement. The general feeling was that it had offended a basic sense of decency. That feeling was based on a number of suspicions.
It was felt that the decision was prompted by short-term considerations; that the price of gas, which appears competitive at the moment, might not be sustained in the long term, and that the decision had not been made in the context of an overall energy policy, as it deserved to be.

Above all, it was felt that those working in the mining industry, who had dramatically increased their productivity rate, had been peremptorily treated.
The mountain of letters followed. Our duty as parliamentarians was surely enhanced when we were forced to consider the issue in detail. That is exactly what I and many of my colleagues have done.
As the House may be aware, I have experience of the oil industry, a parallel industry in the energy sector. I have seen oil traded across international markets for many years. That experience taught me that the energy sector is bound not just by domestic economics, but by international ones and by international costing. That applies equally to the coal industry.
Opposition Members may not realise that, although I represent a rural idyll, my constituency also has a deep mine, Asfordby, which has received tens of millions of pounds investment. It is set to be one of the most successful in the coal industry. I welcome its success, which I want to encourage.
In trying to wrestle with the problems that the original announcement caused, one must accept, as my hon. Friend the Member for Clwyd, North-West (Mr. Richards) graphically explained—I am sorry that his explanation was not welcomed by Opposition Members—that the coal industry is an industry in decline. We must face the realities of that decline.
It is all too sad that, as the coal industry shrinks, we fail to sing the praises of the oil and gas industries, which have risen to take the place of coal as the major electricity generating sources. The oil and gas sectors have been a tremendous triumph, but we hear far too little about the success that private enterprise has brought them. We hear far too much from the Opposition about what has happened to coal, but they fail to appreciate what is happening elsewhere in the energy sector.

Mr. Nicholas Winterton: Will my hon. Friend give way?

Mr. Duncan: I will do so, because I know that my hon. Friend holds strong views.

Mr. Winterton: Does my hon. Friend accept that using gas for energy generation is extremely wasteful, whereas its use for domestic appliances is extremely efficient? Does he also accept that we have finite reserves of gas, whereas we have almost unlimited coal stocks underground?

Mr. Duncan: My hon. Friend has beautifully encapsulated all the fallacies of his position. First, gas reserves, like oil reserves, are extensive, but both are finite. Secondly, it is not for Members of Parliament to make commercial judgments in a field in which professionals are better able to judge. The further we remove ourselves from those decisions, the better. It is not for us to judge whether gas or oil will run out. [HON. MEMBERS: "It is."] I think that it is not.
There has been mention of the French interconnector. The contracts for the purchase of electricity through the interconnector were undertaken by the last Labour Government. There would be severe penalties should we withdraw. Furthermore, withdrawal would be in breach of article 30 of the treaty of Rome.
I should like to address the charge that the industry is rigged. It is self-evident that National Power and PowerGen are a duopoly for the generation of electricity. More important, they are—to use strict economic


language—a duopsony. They are the country's two buyers of coal and, indeed, of other sources of energy. However, although they have market power, they judge that they can generate electricity more cheaply by using gas.
Let us imagine what the situation would be if there were five, six, seven or even eight purchasers of gas or coal. It is probable that they would all make the same assessment. The actual structure of power generation does not in any way alter the basic fact that coal is too expensive and that the mines cannot find a market. The charge that the industry is rigged simply does not stand up to investigation. It is not right to suggest that developments are having a detrimental effect on what would otherwise be the fair play of the market.
In my view, the Government are right in trying to alleviate the difficulties created by the transition of an industry that is in decline by reason of other sources of energy generation. They are doing the right thing in trying to pave the way for privatisation of the mines that remain and can produce coal effectively and efficiently.
However, I seek an assurance that some money will be made available to assist the Union of Democratic Mineworkers in what I hope will be an effective management and employee buy-out, so that the work force, who have been so effective in improving productivity, may have a chance to show what they are capable of. I hope that, in this regard, my hon. Friend will be able to give me some comfort.
I look in vain for any specific Labour commitment to keeping mines open, to shelling out the enormous amount of money that would be involved. It has been argued today that so much money has been poured into the mines that they must all be kept open for fear of losing the benefits of the subsidies. That is an extraordinary argument. If it is proved that mines can survive only with continued enormous subsidies, it is better to close them now than to pour good money after bad and cause unemployment in the gas and oil industries.
I hope that, on reflection, people will realise that the Government's decision, though difficult, is the right one, and that no purpose will be served by efforts to hold on to an industry that is in decline and cannot be sustained without the investment of many billions of pounds that could be better spent elsewhere.

Mr. Kevin Barron: I spent a few minutes pondering which part of the speech of the hon. Member for Rutland and Melton (Mr. Duncan) had been passed to him by the Minister's Parliamentary Private Secretary. At first, I thought that it was the reference to a coal industry in decline—something that was mentioned earlier in what resembled a GCSE economic history paper. Conservative Members ought to talk about the British coal industry in decline, for the industry throughout the world is not in decline. Indeed, there is expansion in Asia, Africa and elsewhere. The percentages are in double figures, and that situation has prevailed for many years.
Let me give the hon. Member for Rutland and Melton some information about the French interconnector. The contract was signed in 1981. I do not know how good the hon. Gentleman is at figures, but he should be able to work out that 1981 was two years after 1979, when the Concservative Government were elected. But there is a point that is often overlooked. The French interconnector

contracts were renewed this year, following the debate about what was happening to to the British coal industry. At that time, the Government knew that the equivalent of 6·5 million tonnes of coal, in terms of electricity generation, was being imported. To my knowledge, only one regional electricity company decided not to participate. If there had been some Government action in respect of the French interconnector, the pit closures that have occurred since the end of March might not have been necessary.
I made a speech in the House last October, following the announcement that the two remaining mines in my constituency would be subjected to changes. Kiveton was to close altogether, and Maltby was to be mothballed. Since then, it has been announced that Maltby is to be put on a development status basis. The Minister, having replied to an Adjournment debate that I initiated on this subject, will know that in the past two months 700 men at Maltby have been made redundant, despite the fact that it is one of the most profitable mines in Britain.
The Government's amendment to the motion indicates that they will offer to the private sector pits that they do not themselves want to keep in production. The Minister knows that that is not true. The Maltby work force, together with people in the City and others in the private sector, have been trying to make a bid so that the mine might be kept in production, but have come up against a point-blank refusal. In fact, the Minister refuses even to meet the people concerned.
About 150 people are left, but they are not producing coal any more. The bonus scheme that was related to the level of production has ended. Information that I have received from British Coal contradicts that, but it is a fact that people now working at the mine do not have a chance to earn bonuses. Thus, they have suffered in terms of weekly income, despite assurances that they would be protected.
My interest in the Kiveton colliery is shared by my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes), as two mines were amalgamated many years ago. Kiveton is one of the 12 market-tested pits. I have spoken to men and management a number of times since the term "market-tested" came into vogue. What has it meant for the workers? The machine shifts have been reduced in number from nine a day to six, as was announced two weeks ago. On that basis, 50 jobs have disappeared.
The mine's market amounts to only one third of its current production. It is selling into a market that is being supplied by one of the mines that the Government are offering to the private sector. Anyone interested can have a go at the coal mine, but not at the market that used to go with it. It is quite clear that, unless something happens with regard to future contracts with the electricity supply industry, Kiveton, together with the others on the list of 12 market-tested pits, will close.
What is the reason for this? Currently there is a contract for the supply of 40 million tonnes, including 8 million tonnes from open-cast mines. This time next year, the quantity will be 30 million tonnes, of which 7 million tonnes will be from open-cast mines. The implications for the deep-mine industry will be severe, as must be clear to anyone who takes the trouble to study the situation. Today, the Secretary of State for Employment repeated something that the Minister has said occasionally: that the answer is to contract more coal by the use of subsidy.
What is happening about introducing subsidies? At the last Department of Trade and Industry Question Time, on 23 June, in answer to a question about how many requests the Minister had received from British Coal for a portion of the subsidy for expanding the coal market, the Minister said:
My right hon. Friend and I have not received any specific requests for subsidy from either British Coal or private sector producers."—[Official Report, 23 June 1993; Vol. 227, c. 295.]
I received a letter five days later from the chairman of the British Coal Corporation, who said:
We made a very competitively priced offer to the generators for additional sales. This has been rejected by National Power who say they will reassess the market for coal in the autumn. And, while we await a formal response from PowerGen, the public statements of both generators have offered little comfort, suggesting that they would be willing to buy more coal, but possibly not a great deal, probably not until some months have elapsed, and then only at very low prices.
That is another of Mr. Clarke's more morale-raising speeches since he has been appointed chairman of the British Coal Corporation.
The Minister and the chairman of British Coal Corporation cannot both be right. The chairman cannot have made a competitive offer to the generators while no one has asked for a subsidy from the Minister—or can he? I want the Minister to tell us when he winds up the debate. My information is that the rules with which people must comply before receiving a subsidy mean that they do not know how much subsidy they will have before they make a formal approach to the generators and receive a formal contract in return. They must agree provisional terms before going back to the DTI and asking how much subsidy they can have. It is an absolute sham and the Minister knows it, because he is part of the conspiracy by saying that nobody has asked for a subsidy, while British Coal says that its offers have been rejected.
The Government have the power to do something about the current crisis in the deep-mined coal industry. They must know that, by this time next year, when nearly 25 per cent. of current contracts will come from opencast coal mining, there will be a massive reduction in deep-mined pits. They tell us that they are holding discussions with the generators about coal stocks. If they wish, they can act now to ensure that that does not happen.
However, I doubt whether they will do so because, since the introduction of the White Paper in March, their actions have been consistent with the view reported to them in 1991, when they appointed N and M Rothschild, a merchant banker in the City, to look into the privatisation of the British coal industry. That first report, which was leaked to the Opposition and denied by Ministers, said that in some 12 months' time we would be down to 14 deep mines. I predict that that will happen if something is not done to stop it.
I am fed up with seeing people stand up and wring their hands about the problem. Privatisation does not come into it. In 14 months' time there will be no industry to privatise because the deep-mine industry will have gone, and the Government will have been a major part of the conspiracy to get rid of it.

8 23 pm

Mr. Jim Lester: I agree with the hon. Member for Rother Valley (Mr. Barron) about opencast mining. The prospect of new opencasting of green field sites has become unacceptable at any price, whether environmental or in terms of the need for deep-mined coal.
Although our coal industry has declined, many of us feel that it should not become extinct because it is in the national interest that we should retain a four-fuel potential well into the next century.
I have made speeches on the White Paper and shall not repeat all that I said then because it is all on the record, but the problem remains the same: how do we retain a short-term market in order to retain a deep-mine potential for the future?
My right hon. Friend the Secretary of State spoke about a freer market for coal. What he said is true but it should be a freer market in the sense of putting on the market those pits which British Coal does not need. However, if the market is the same in terms of where we sell the coal, I see no point in anyone wanting to buy a pit unless they have a contract to sell the coal. If the amount of coal about to be burnt is exactly the same, it is not a freer market but simply a different market for exactly the same amount.
We now realise that the generators, not the Government, control our energy policy. That concerns me considerably. In the near future, little more than the core contract will be required, and it will take at least 18 months before we can see what coal stocks are likely to be required. As and when coal is sought, it will be sought not on a contract basis but on the stock price that we want at the time. That is no way to get people to invest in the industry or to look to the future.
In the short term, the Government must concentrate on the question of stock. I welcome the fact that my hon. Friend the Minister is currently negotiating stocks and discussing import substitution.
My main concern, which I have discussed in previous debates, is about the relationship between coal-fired power stations and research and development. However much we discuss the short term, unless we have a policy on coal-fired power stations the coal industry has no future.
The over-capacity of generation, which has come about through the building of new gas-fired power stations and the successful operation of nuclear power stations, has caused that pressure on older coal-fired power stations. Of those, a capacity of 500 MW has already been closed and we hear of more closures to come. Another problem for coal-fired power stations is emission control, which must involve research and development if they are to have a future.
In the previous debate I spoke about the need to retain intermediate power stations. I have discussed with my hon. Friend the Minister the High Marnham and Cottam power stations in Nottingham. Those intermediate 2,000 MW power stations would he ideal for refitting and for using the new technology, which is not necessarily market oriented because it rarely is. We have offered to fund some new technology through extending research and development for the next three years, but it is not a sensible basis for investing in new technology, research and development, if at the end of that time there is no use for the product. We will be unable to fit the topping cycle—the


latest technology—or anything on which Britain has worked for centuries. We have the best coal burn technology in the world.
I remember going to the United States before 1979, when I was interested in energy and the United States was consulting our technology to see how best it could burn its coal. That technology has now been developed in the United States and if we want it we must buy it back from them. The last thing we want is the same thing to happen to the topping cycle, which is the ultimate in terms of coal burn and using gas for clean emissions.
I desperately want my hon. Friend the Minister to say whose responsibility it is to declare an overall strategy and policy for coal-fired power stations up to the year 2,000, which is not far away, and beyond. Where do research and development fit into that overall picture? Unless we act, we are simply whistling in the wind when we discuss the coal industry, production, costs and so on, because there will be no market for them. I am convinced that we need to retain the potential for a deep-mine industry in this country. I have no mines in my constituency, but I speak because I have an interest in Nottinghamshire and coal, which has a role to play. We must ensure that it fulfils its role.
Unless the Government are able to concentrate on the short-term stock levels, the estimated coal burn over and above the core contract of the 16 million tonnes that we are prepared to subsidise, a strategy for coal-fired capacity and the need to refit and modernise before the year 2000, I see a bleak immediate future for miners. The future is bleak at a personal level—of which hon. Members can speak graphically—and, more importantly, in terms of the long-term balance of fuel supplies.
When my hon. Friend the Minister replies to the debate, I hope that he will respond to those salient points —the short-term prospects in the next 18 months and the energy burn and coal-fired strategy for which the generators are not responsible. The generators have a business to run and they are seeking to do so as best they can, but the four-fuel policy is the Government's policy and the Government must be able to provide an overall strategy for coal-fired generation.
The youngest station was completed in 1974, which is a long time ago. None of us can envisage a new coal-fired power station being built in our lifetime, but we can envisage utilising the capacity of existing power stations, and refitting and modernising them to take us into the next century and ensure a future for Britain's deep-mined coal industry.

Mr. Paddy Tipping: It is 102 days since the Government published the White Paper on coal, and 98 days since the House had the opportunity to discuss it. In the space of four days, the Government put together a quick fix to persuade people to vote with them. That political fix is rapidly becoming unglued.
The Government promised a subsidy that would keep 12 collieries open while they were market testing. The Government have been unclear about the length of time that that market testing should take. Since March, four pits have closed in Nottinghamshire. There are grave concerns at Rufford, Bilsthorpe and Calverton about the future of those mines as market-testing pits.
The House knows that the men at British Coal have decided to close Rufford colliery. Last week the Prime

Minister said that that decision was taken for two reasons: first, there were geological problems and, secondly, the men had voted to close the colliery. He was wrong on both counts. If, 12 weeks ago, that pit was fit to be kept open, what has changed geologically since then? The answer is that there has been a recognition within British Coal that its marketplace is so limited that, although it is technically possible to keep the colliery open, there is not the financial strength to do so.
There are 600 men at Rufford colliery, but only 226 of them voted for the closure. Rufford is closing because of British Coal's vindictive tactics. The men at the colliery were told that, if the pit was not closed before December, they would lose £10,000. I am not criticising people for taking tough decisions. The Minister for Energy should give a clear response tonight and help the industry. His colleague, the Secretary of State, talked about compassion being shown not just on one side. If the Minister has compassion, he should state tonight that, following consultation with the chairman of British Coal, he will extend the period beyond December. That would give people confidence.
The men of Rufford were also told that, if they did not take the money now and the pit was not closed before the autumn, they would not have the chance of another job. They were told that, if the pit was closed now, they would be transferred. That was held out as their hope for the future.
That is how miners in Nottinghamshire and across the country have been treated. The miners have done everything asked of them and more. Let us consider the record. They have increased productivity by 150 per cent. over the past five years. They are producing coal at half the cost of Germany. In the past six years, the price in real terms of coal from the pithead has not increased. Is it any wonder that all across Europe people think that we are crazy for closing our collieries?
The hon. Members for Clwyd, North-West (Mr. Richards) and for Leeds, North-West (Dr. Hampson) talked about their collieries such as Point of Ayr and Selby. They said that those collieries had a secure future. I beg them not to be taken in by guile because the logic of the marketplace speaks for itself. The contract with the generators is for 30 million tonnes next year. If we take off opencast mining—possibly 10 million tonnes—we will be left with a good period of closure over the next six to 18 months. I believe that that closure period will reduce the number of collieries to, at best, 15, and perhaps even to 12—there will be consequences for privatisation.
We would be left with a rump of collieries. Conservative Members who argue for splitting that group are talking about slitting the throat of the rump of the industry because the energy market is a tough market. We need groups of pits of three, four or 12 to ensure that the industry survives. The call for privatisation sounds the death knell of the industry.
It may well be right to talk about the strengths of the Selby coalfield, but I make a prediction. Given the rate of extraction at Selby, the fact that there is a danger of flooding in the Vale of York, the pressures in the ground at York, and the fact that the overheads at Selby are split between a group of collieries, it is possible that, instead of being the pit of the 21st century, Selby will be closed by the year 2000 or 2005.
There has been talk about additional new contracts with the generators, but such events will not happen for a


long time. The facts speak for themselves. National Power holds 19 million tonnes of coal and PowerGen holds 14 million tonnes. What is at issue is not the price of coal being offered for the new contracts, but the volume of the contracts.
People have talked about the recent hot weather. If I had a fridge full of lager cans and someone knocked at my door saying that I could buy cut-price lager, but I had no place to store and cool the lager, I would not buy it whatever the price. That is the position in which the generators currently find themselves. It is clear that no additional contracts will be forthcoming. At best, if the Government use their best endeavours, the additional contracts will be'small.
The future of the deep-mined coal industry in this country looks extremely bleak. If the Government care about the future and do not want to rat on the commitments that they have given the miners, they must do something about the problem. First, they could move quickly on the nuclear review. Earlier this year, the Minister for Energy promised a nuclear review and said that he would announce its terms before the recess. Will he repeat that statement tonight? Will he confirm that the nuclear review will be announced and will take place quickly? The coal industry will survive only if space is made within the energy market.
It is clear that gas has many advantages. It is fascinating that gas can be subject to a 15-year contract but coal has one of only five years. It was astonishing to hear Conservative Members argue the case tonight for opencasting, because decisions about that should be made locally. It is obscene to tear up fields, pull down hedgerows and knock down trees, when the need for coal can be supplied from the deep-mining industry.
What is the Minister doing about creating a European energy market, and discovering the element of subsidy in EDF—the French company? It is clear that we do not have open access to the European market. The Minister must act quickly to save what remains of the British coal industry.
The Minister probably knows the real hostility that is felt over the Government's backing of British Coal on the pension fund issue. British Coal employees think that it is obscene that, as they see it, they are paying from their pension fund the' cost of their own redundancies. That is not right or proper; it is immoral, and it will be challenged in the courts. I hope that the challenge will be successful.
We want more than anything else a coal industry that is successful, and in which people are rewarded for their efforts.

Mr. Michael Alison: Although there was a sombre hue to part of the speech of the hon. Member for Sherwood (Mr. Tipping), I am glad to follow him, because he sought to move some of the cloud of doom from Nottinghamshire to Selby, which I have the honour of representing.
In the light of the hon. Gentleman's remarks, I will place on record comments that I hope will restore the perspective. They were made by my right hon. Friend the President of the Board of Trade in the House on 19 October last year:

After the contraction of the industry that we are contemplating, British Coal will still be the largest contributor to electricity generation in this country. I confirm that the Selby group is a core part of the future of the British coal industry. We have invested £1·3 billion in that group of pits, which has played its part in securing the improved productivity upon which the long-term viability and, therefore, the future of the industry depend."—[Official Report, 19 October 1992; Vol. 212, c. 214.]
Perhaps I may, without embarrassing him, sound a note of agreement with the hon. Member for Rother Valley (Mr. Barron), while disagreeing with something said by my hon. Friend the Member for Rutland and Melton (Mr. Duncan). I do not believe that coal is in decline; the hon. Member for Rother Valley is right when he says that it is a fuel with a future in the international dimension. I believe that it is a fuel with a future also in Britain, quite apart from having the lion's share of electricity generation that it has traditionally enjoyed.
Gigantic sums have been invested in pits such as the Selby group. When the hon. Member for Normanton (Mr. O'Brien) made his challenging speech about the British coal industry's future—from the point of view of someone like yourself, Mr. Deputy Speaker, who spent a lifetime in the pits—he was at pains to itemise the enormous increase in productivity that British Coal has achieved over the past decade. He said that the figure had increased from 2·3 million tonnes per man shift 10 years ago to 8 million tonnes per man shift today. I believe that the exact figure is 7·86 million tonnes, which must be a record average.
When one places that against the figure of more than 30 million tonnes per man shift that is regularly achieved at Selby, one sees the dividend from the unprecedented scale of investment made there by this Government and since the end of the war. One sees also the dividend from manpower productivity that such investment secures.
One must agree with the hon. Member for Rother Valley that there is a future for the coal industry in Britain, based on pits such as Selby where there has been huge investment and staggering productivity is being achieved, which can challenge and beat any importer and even dumped coal, if we are allowed to have our way.
The hon. Member for Normanton, who is a near neighbour of mine in Yorkshire terms, made a plea for the coal industry in general and for his constituency pits in particular. That is the dilemma. Given the productivity achieved at Selby as a result of massive investment, it is self-evident that if the entire British coal industry is to have a future, investment and output must be concentrated on the pits where productivity is on the Selby scale. That means facing a continuing contraction of less productive, less effective pits in different parts of the country and concentrating on those such as Selby.
That is not simply a self-interested, constituency point, because a large proportion of those employed at the Selby group come not from my constituency but are miners who were redeployed from pits in south and west Yorkshire. The logic of concentrating coal mining on high-productivity pits such as Selby is that it offers a genuine prospect of continuing employment in coal mining for those who want it. Even within the Selby complex, a number of miners were attracted by voluntary redundancy terms. In recent years, we lost 3,000 workers voluntarily, which has helped to increase the group's productivity even more dramatically.
If one combines the scale of support for relocation, retraining and re-employment that the Government


manage to provide through British Coal Enterprise Ltd. and by other means with the corresponding huge investment in modern pits such as Selby that has been seen since 1979 and even more dramatically since the 1984 strike, one gets the best of both worlds. One achieves a world-beating British coal industry with prospects for the future, redeployment of manpower, and the sustaining of the old coal mining communities.
The Government have pursued an acceptable and rational policy. They made effective use of the huge amounts of money that they poured into the industry, and have tempered the winds of redundancy for those who will be displaced from older pits. I urge my hon. Friend the Minister to continue with that double-barrelled approach of rational, if costly, investment resulting in a high-productivity, low-cost industry, and of offering hope to miners of redeployment in other industries or of being drawn to areas such as Selby, where many miners have already been redeployed.

Mr. Eric Illsley: The right hon. Member for Selby (Mr. Alison) spoke about the mining complex in his constituency. I remind him that it was the last Labour Government who provided the investment for that complex under their "Plan for Coal" between 1974 and 1979 when a market of 150 tonnes was planned. The right hon. Gentleman shakes his head, but if he checks he will find that that is the case.
We are beginning to see the level of the deception perpetrated by the Government on the public and the mining industry since last October when the decision to close 31 pits was followed by a tremendous public outcry. That showed that people were sick to death of what the Government were doing to the industry. In October, dozens of Tory Members ran to the press saying that they would not vote for the measure unless more than 20 pits were saved. With one or two notable exceptions, all those hon. Members backed off and supported the Government's proposals.
The White Paper was published in March, but it was basically a worthless document, designed simply to placate Conservative Members and decieve the country into believing that some parts of the industry were to be saved and some collieries reprieved. It was a quick fix to get the Government out pf a hole. As my hon. Friend the Member for Sherwood (Mr. Tipping) said, only 12 weeks alter the proposals were published, collieries that were supposed to be reprieved are being closed. Production has already ceased at about 20 pits and the reprieved pits are again in line for closure. In addition to three that have closed already, another three in south Yorkshire seem to be under threat.
Not a penny of subsidy has been paid by the Government to support the industry. The extra tonnage due to be sold to the generators has not been sold to them. The aid to the industry suggested in the White Paper was a complete sham. Some of the collieries not even mentioned in October or referred to in the White Paper, the safe 19 collieries, are also under threat. Some of the 12 that have been reprieved or put out to market testing might be saved at the expense of some of the collieries which at that time were said to be economic. That shows that there is no economic case for the closure of any of those collieries.
Comparison of the performance of one colliery against another, profit comparison, is futile. The Government are trying to reduce the amount of coal being produced because there is no market for it. It was wrong for the President of the Board of Trade to speak on a number of occasions about uneconomic pits, because it is simply a case of taking out lumps of the market.
The arguments that my colleagues and I have advanced since October, especially in March when the issue was debated, have proved to be correct. There is no economic case for closure; the Government are simply removing tonnages and the White Paper failed to address the problem of the market for coal. We have said that time and again, but that market could be addressed if the Government had the political will to do that. They have not done anything to increase the market for coal.
The Government have not done much for the coal industry since 1974, the days when the Government of whom Baroness Thatcher was a member were forced out of office because of the coal strike. In October, Lord Parkinson reiterated the philosophy that the Government have attacked the industry since 1974 because they blame it and the National Union of Mineworkers for their loss of office at that time.
Most of the coal industry's problems arose from the privatisation of the electricity supply industry and the creation of a rigged market. The creation of the duopoly of National Power and PowerGen gave those companies the opportunity to buy coal from any source. That followed lobbying by Lord Marshall of Goring, the then chairman of the Central Electricity Generating Board, who made no secret of the fact that he wanted to buy coal from other than British Coal. He told a Select Committee on Energy that the CEGB took 85 per cent. of its coal from British Coal and that that would have to change. He did not advance any economic or diversity arguments for that but simply said that it had to change.
The privatisation of the electricity supply industry gave the go-ahead for the dash for gas. There was such a flurry of applications that British Gas had to increase its price by 35 per cent. in respect of stations not already contracted. Killingholme gas station opened on 19 April with a staff of 35. It is completely false for Conservative Members to say that jobs in oil and gas will be lost. Some 19 GW of gas-fired generation are likely to come on stream; that is equivalent to about 30 million tonnes of coal, which—surprise, surprise—is the contract for next year's coal market. Gas-fired generation from stations that have not yet even been built could totally eclipse the contract market for British Coal. No jobs have been lost as the stations have not yet been built and, in any case, 35 people are required to man one such power station.
For years the Government have refused to implement any sort of sensible energy policy. Their only policy is to leave it to the market. The Government have totally rebuffed all opportunities for coal. The Select Committee on Energy, which is now disbanded, took evidence on clean coal technology, about which some hon. Members have spoken.
There is no way in which the Government will back such technology. They closed the pressurised fluidised bed combustion plant at Grimethorpe and have no intention of looking at any advanced technology using clean coal. The operations of our competitors, especially Texaco in America, are far in advance of anything that has been done in this country. It is the old argument, which was also


advanced in respect of the fast reactor, that we do not want it here and will not spend on it, but we will buy somebody else's technology when it is up and running and everybody else has bought it.
Hon. Members have spoken about how the market for British coal can be improved. Despite the damage to our balance of payments, we have the capacity to import millions of tonnes of coal which is dumped, sold at less than its cost of production, by other thriving coal industries.
My hon. Friend the Member for Normanton (Mr. O'Brien) spoke about the new coal terminals. On 23 June, the Financial Times carried a photograph of the Portbury dock at Bristol, which is one of the biggest terminals in the country, with the capacity to handle 7 million tonnes of imported coal a year. On the day that the photograph was taken, a 37,000-tonne ship was unloading coal for National Power. Gladstone dock on Merseyside will open later this year and will have a capacity to handle 5 million tonnes a year.
That is nothing new: we have been talking about it for years during debates on the Associated British Ports (No. 2) Bill. When the Select Committee on Energy looked at the coal industry, it warned of the effect, and the conclusions of the Select Committee on Trade and Industry are nothing new, although the hon. Member for Leeds, North-West (Dr. Hampson) referred to them as if they were set in concrete. The Energy Select Committee issued those warnings years ago.
I have already mentioned the threat from gas and the 30 million tonnes that could eclipse the coal industry altogether, but gas-fired generation is not cheaper than the existing coal-fired generation. On the contrary, it is more expensive. The gas-fired generators are also bidding to the pricing pool at a negative price, so they are, in effect, submitting a contract to give their power away. Due to the workings of the pool price mechanism, those gas-fired generators take the marginal cost into the pool and take the highest cost capacity. Bidding with a negative bid and taking out the highest cost capacity, they say, "Thank you very much," and make a profit.
Last week, it was announced that the subsidy to nuclear power for the year was £1·35 billion. Nuclear power has a guaranteed market, but privatisation exposed the sham of the nuclear power industry—it is far more expensive. Other factors to be considered are that 93 per cent. of opencast sites are on green field sites and that power prices have increased by 32 per cent. in the past year, an increase into which Professor Littlechild requested an investigation. Blue Circle Cement complained that the price—

Mr. Deputy Speaker: Order.

Mr. Winston Churchill: It is a matter for regret that my right hon. Friend the President of the Board of Trade cannot be with us for the debate. I know that I am not alone in wishing him a full and speedy recovery.
My right hon. Friend the Secretary of State for Employment made some powerful points about the 353 pits closed by Labour Governments, from 1964 to 1970 and from 1974 to 1979, with the attendant loss of 185,000 coal industry jobs. That is certainly a fair point to make, but tonight we must address the reality of the present

situation and the prospects for tomorrow. That is what the men, in what remains of the mining industry, want to hear in the House.
Those prospects look decidedly bleak. The market for coal has effectively collapsed. The generators are clearly abusing their joint monopoly. Having challenged the Government on several points, the generators have won the day. They seem quite determined not to commit themselves to any new purchases before October or November; even then, they will not sign for long-term contracts, but propose to buy in parcels of 200,000 or 300,000 tonnes under tender. That will surely make the United Kingdom price collapse to below world market levels.
The generators know how that policy of buying short wrecked the United States coal industry in the 1960s and evidently they are seeking to emulate it over here. In May, British Coal offered the generators coal at 93p per gigajoule delivered to inland power stations. Even at that price, it was unable to find purchasers.
The generators want to close capacity at their older coal-fired stations. Some of those stations are 30 years old and have no gas cleaning. None the less, the owners are refusing to sell at a true market value; instead, they are demanding the replacement value for those antiquated assets because they do not wish for competition. Although there is a gross surplus of plant and of input fuels, the price of electricity does not go down. Where is the regulator? Where is the Monopolies and Mergers Commission? Where are the Government to hold the ring where patently there is no free market?
The British mining industry is in better condition today than it has been at any time this century. British coal can be produced at 80p per gigajoule, yet viable pits are being closed. Silverdale pit, into which £90 million was invested five years ago and which has a new drift, with 30 years of life, is to be closed. Both Rossington and Markham Main pits have seen £6 million to £7 million pounds worth of equipment buried. It is difficult to describe that as anything other than institutionalised vandalism.

Mrs. Llin Golding: In Newcastle, we have no information that Silverdale is to be closed. We ask the question all the time. No one has told us that it is to be closed. I only wish that someone would tell us what is happening in Silverdale.

Mr. Eggar: It is not closing.

Mr. Churchill: I heard my hon. Friend say that it is not to be closed. I am delighted to know that and I hope that remains the position. To see such an investment put into jeopardy would be a serious matter.
Meanwhile, British Coal is importing about 100,000 tonnes of Polish coal, and the figure will rise as more pits close. In addition, about 500,000 tonnes of Colombian coal is being landed at Thames docks and a further one third of a million tonnes at Mersey docks. Meanwhile, the generators are planning a major uplift from their stocks, which stand at 34 million tonnes. If they are allowed to run down their stocks too fast, there will be virtually no market for any coal above the core contracts in the current year, no matter at what price it is offered.
In the current year, the British Coal core contracts are down by 25 million tonnes to 40 million tonnes. The nuclear industry is increasing its output by 2 million tonnes to 24 million tonnes coal equivalent. Gas is up by


7 million tonnes to 11 million tonnes coal equivalent. The others are stable at 18 million tonnes, making a total of 93 million tonnes in the current year. That leaves uncommitted from the estimated fuel burn this year only 16 million tonnes.
That is sufficient to provide life and justification for the 12 reprieved pits; but if, as seems likely, the genera tors are allowed to uplift 11 million tonnes of their 34 million tonnes of stock, that leaves only 5 million tonnes uncommitted in the current year, of which 2 million tonnes almost certainly will go to imports, leaving just 3 million tonnes available in the current year. On that basis, there is no way in which the 12 so-called "reprieved" pits can have a future.
The Government should make it clear to the generators that there must be no rapid rundown of stocks. It have said it before, and I make no apology to the House for saying it again: we do not have a free market in energy. We have a heavily rigged market—indeed, a subsidised market in certain quarters. Between last year and 1996–97, the nuclear input will increase by 6 million tonnes coal equivalent and the gas input by 30 million tonnes coal equivalent—each million tonnes, in round figures, displacing a pit.
Both those energy sources have privileged access to the market. Gas can pass on the capital costs to the consumer of its newly built power stations. They were set up by the regional electricity companies, so they have a cosy relationship with them. Nuclear energy has not only privileged but guaranteed access to the market for every kilowatt hour that it produces. On top of that, nuclear power gets a £1,200 million a year subsidy. So much for the free market—it just does not exist.
The Government's amendment claims that they have accepted the principal recommendations of the Select Committee report. They have indeed accepted the key recommendation of providing a subsidy to the generators to burn up to 16 million tonnes of coal over the above the 40 million tonnes core contract. That appears to amount to a subsidy of £400 million to £500 million. Despite undertakings given by the Government, and specifically by the President of the Board of Trade, that the Government would use their best endeavours to widen the market for coal, which alone can underpin and give a long life to the reprieved pits, there is no evidence that they have any will or determination to do so. Without a wider market, there will be no additional sales. Without additional sales, no subsidy will be payable; that subsidy will remain entirely theoretical and uncommitted.
I will put three questions to my hon. Friend the Minister. First, have the Government told the new Government of France, at the highest level, that it is unacceptable to the House and to the country that taxpayers' money should be used to import electricity from France—the most expensive electricity on the United Kingdom market, with a price identified by the Select Committee of 3·4p per kWh—with the effect of putting no fewer than six British pits out of business?
Secondly, have the Government taken steps, as recommended by the Select Committee, to explore the possibility of gas stations being used for mid-merit or peak generation, instead of for baseload capacity? If that were done, a market could be provided for 10 additional pits.
Thirdly, are the Government willing to order the generators to draw down their stocks at no greater a rate than 5 million tonnes a year? That might prove critical in saving some of the 12 reprieved pits.
I fear that not enough is being done by the Government to underpin the market for coal. It is not enough to tell the mining industry, "Here is a subsidy—go out and find yourself a market." The Government must live up to their responsibilities and play their part in finding that wider market because, as many right hon. and hon. Members on both sides of the House have said, it is a rigged market.
It is about time that the Government made it clear that they are prepared to re-rig the market in favour of coal instead of against it. That could be done by establishing a neutral flow through the interconnector with France, by reining back gas stations to 70 or 75 per cent. of operations—at which point they would still be profitable, although not as profitable as was originally planned—and by curbing the rundown of stocks. Without those three essential elements, or a combination thereof, the 12 reprieved pits have no future and those pits, and others perhaps on the list of 19, will inevitably close.
We are presiding over the closure of the most efficient deep-mined coal industry in Europe. We are abandoning Europe's greatest national resource and condemning Britain in the 21st century to becoming dependent on imported energy, with all the implications that that holds for our balance of payments and our security of supply. The Government's short-term attitude to our long-term energy resources and their refusal to exert themselves to give coal a fair opportunity to compete on equal terms with other fuels in the years ahead means that, with a heavy heart, I shall be casting my vote against the Government tonight. The miners of Britain and the coalfield communities that depend on them deserve better from the Government than they have so far been offered.

Mr. Bill Etherington: I am somewhat pressed for time, as I understand that I must finish at about 9.20 pm. I shall be as brief and succinct as possible, as most hon. Members have been tonight.
First, I declare an interest, as I am sponsored by the National Union of Mineworkers. My sponsorship does not perhaps reach the large amounts that we have read about in connection with Mr. Nadir—that is quite a name to have under the circumstances—but it is something of which I am proud. I was a miner for 21 years.
I have been waiting since I entered Parliament to put one or two things straight. First, I want to tell the Secretary of State that I do, indeed, burn a coal fire, and have done so for many years. I did not want to intervene from a sedentary position when the challenge was made earlier in our proceedings.
The second thing that I have wanted to say for a long time concerns the term, "the enemy within", which was applied to me and to many others by the Baroness Thatcher in 1984. Under those circumstances and according to those criteria, I am very proud to be classed as the enemy within.
I want to regale the House with a story. My grandfather was a member of the Durham Miners Association. In 1940, some miners were working two or three days a week and the Durham Miners Association was having to pay out large sums in unemployment benefit—none the less, it


managed to provide two Spitfire fighter planes for the benefit of the nation. Shortly after that, the association was responsible for collecting many thousands of pounds, which was a tremendous amount of money in those days, to try to help the Russian people who were fighting against German oppression.
When I hear Baroness Thatcher talking about the enemy within and when I think about my perception of the miners, I wonder just how much money went from the Grantham grocers to help the Government out during those troubled times.
Unfortunately, I was not called in the debates last October or in March, but at least I shall have my six minutes today. It was fairly obvious from the public response to the debate that followed the announcement by the President of the Board of Trade that 31 pits were to close, that the public did not accept that the free market forces system had worked.
In effect, the public were telling hon. Members on both sides of the House—at the time, there was a response from many Conservative Back Benchers—that they wanted the Government to do what they had elected them to do, which was not to leave matters to market forces but to govern the country. That was what people voted for, even if many of them voted for the wrong party and now realise their mistake. The public wanted the Government to act —to do something about the situation.
I am as sorry as anyone about what has happened to the President of the Board of Trade in recent weeks; I hope that he is soon back here among us. I should have liked him to be here to hear what I have to say, because I do not like talking behind people's backs—which, in the circumstances, is almost inevitable, as I am sure all hon. Members will understand. I shall refer to the Government instead.
The Government played for time. It is a sad fact that, if one is cynical, one is often proved right. Last October, I took the view that the Government were shocked by the reaction that they received from the public, and played for time. When I introduced a ten-minute Bill in December, I said as much. I said that we were not being kidded, that we knew what the end result would be. Sadly, we have been proved right.
It is not correct for the Government to say that they have accepted the main points of the report of the Select Committee on Trade and Industry report. In fact, the reverse is the case. I must say in passing that my union —the NUM—did not think that a very good job had been done, and was highly critical of the Select Committee report. Nevertheless, had the Government accepted the letter and spirit of that report, we should not be in the position that we are in today.
It is interesting to examine the recommendations that were accepted. The President of the Board of Trade said quite honestly, throughout the investigation, that the problem was the market. My view is that the market has been distorted since the denationalisation of the generating industry. In many ways, the present Government are not to blame—Lords Wakeham and Parkinson were the ones responsible for the destabilisation of our generating industry.
The only proposals that have been put forward since then have involved a subsidy, which the Government

know will never be taken up—just as the colleries will not be bought by a private owner—because there is no market: the coal cannot even be given away. The second suggestion was for longer hours.
Wearmouth colliery, which is in my constituency, is doing extremely well. It is working better reserves than it has had in its 150-year history: it is working in coal 7 ft 6 in thick, unlike that mentioned by the Secretary of State when he talked about the thin seams full of chlorine and sulphur. Only 25 per cent. of its coal is finding a market. Although £20 million was invested in Wearmouth colliery, unless the Government interfere, it is doomed, as are many others.
Many of my constituents, not only miners, think that the Government have been responsible for a sophisticated piece of political chicanery, and that is what it is. I hope that one or two Government Back Benchers, some of whom have an honourable record of voting against what they do not believe in, may come to our rescue tonight. If nothing else, it would let the public see what is going on. On that happy note, I will conclude.

Mr. Martin O'Neill: In some respects, the debate has been encapsulated in the last two speeches. We have heard a miner speak with authority, considerable personal knowledge and experience and great affection for his industry. We also heard the hon. Member for Davyhulme (Mr. Churchill) announce his intention to vote with us this evening because of his dissatisfaction with the manner in which the future of the industry has been handled. It is clear that, in the past nine months, this country has, on a number of occasions, been transfixed by the future of the coal industry.
It is perhaps no accident that the Government managers decided that this Opposition debate should be held at the same time as the announcement on defence cuts. It is certainly true that other issues apart from the coal industry are being given media attention.
It must be said that if the defence of the country depends on strategic considerations, our supply of energy is of equal strategic significance. It requires equal long-term planning and equal support from the Government at every stage in that process.
Today's debate has lacked some of the colour that we would have associated with it had the right hon. Member for Henley (Mr. Heseltine) been present. We all wish him well in his recovery. As the speech of the Secretary of State for Employment showed, the debate was Hamlet without the President, although, at one stage, we had the ghost from Leeds trying to make a contribution.
If there is a tragedy today, it is the way in which the Government have handled the coal industry. The work force in the past two decades did everything asked of them. Those who in the 1960s and 1970s were offered the opportunity to seek other employment did so in the knowledge that there were opportunities for work elsewhere. The closures that the Labour Governments of that time carried out, although on occasions in times of controversy, were carried out in the knowledge that those individuals would be able to obtain secure employment in the future.
It is also clear that, in the past two decades, the coal industry has been capable of increasing its productivity by quite massive amounts. Now that the Secretary of State is


back in his place, I should like him to try for once to treat the debate seriously, as there was great play made of the apparent increase in productivity in the 1980s compared with the 1970s. However, he did not make clear his basis of comparison.
In the 1970s, the driving of roads into collieries to allow access to coal was carried out by British Coal employees. That meant that they were not producing coal but were going through stone, scrap and the like. That was not reflected in the productivity figures, and it was characteristic of the Secretary of State's disgraceful speech that he did not have the intellectual honesty to compare like with like on this fundamental question. He shakes his head. If he would care to dispute that point, I am happy to give him the opportunity to do so.
A number of hon. Members referred to the Select Committee's report, which said that no more consents should be granted for combined cycle gas turbines and that, since the publication of the White Paper consents for some 1,500 MW of CCGT power at Staythorpe, King's Lynn and others had been granted—the equivalent of some 10 million tonnes of coal, yet, at the same time coal-fired plants at West Thurrock, Palihan and Thorpe Marsh have been closed.
Thorpe Marsh, which is in Doncaster, is owned by National Power. In the May edition of Power News, the plant was praised for its thermal efficiency and excellent industrial relations. In March, the plant accepted 120 redundancies on the understanding that that would ensure its future. Since 1990, £40 million has been spent on the plant. The station consumed some 670,000 tonnes per annum—a third of the output of Bentley and Hatfield collieries.
Only 20 minutes up the road at Keasby a new 750 MW gas power station is being constructed. When the issue was raised on the Adjournment a couple of weeks ago by my hon. Friend the Member for Doncaster, North (Mr. Hughes) and my right hon. Friend the Member for Doncaster, Central (Sir H. Walker), the Minister for Energy said:
It would not be appropriate for the Government to intervene on an issue of this kind."—[Official Report, 16 June 1993; Vol. 226, c. 972.]
I remind the Minister that the Government retain a 40 per cent. share in National Power and that £40 million of shareholders' money—in many respects, our money—has been spent on the station, to say nothing of the prospective redundancy costs. As the two collieries concerned were on the hit list, we can see that the consequences of the package of redundancies and closures will be considerable for that part of the country. I suppose that the cynic would say that it was merely an example of the wish being father to the thought.
We were told that gas-fired power stations are built on the assumption that coal-fired stations are dearer. The White Paper admits:
At the prices in the prospective contract for British Coal suppliers from April 1993 onwards, the avoidable cost of generating electricity from large existing coal fired power stations (using 500 MW turbines) is generally less than the full costs of a new CCGT, assuming both run on baseload.
On the radio this morning, the Minister for Energy said that if there was a difference between the two it could be attributed to combined heat and power. [Interruption.] Some of us heard the radio programme this morning. Perhaps the Minister did not understand what he was saying. He said that the difference between coal-fired and

gas-fired power stations was the thermal efficiency represented by combined heat and power. Today, the director general of the Combined Heat and Power Association issued a press statement suggesting that that claim was rather difficult to support because only 1 per cent. of the new power stations have CHP.
The difference does not come from that at all. The only difference between the two arises from the arrangement of the baseload efficiency of CCGT. Coal-fired power stations will not be able to operate on baseload. There is the rub. It is not simply a matter of markets or a matter of demand; it is a matter of how the markets work. The way in which the markets work is at the core of the problems of the coal-fired power stations, because they are not being given the chance to operate on base load. That opportunity is being afforded to the gas-fired stations, which do not need to operate on base load but are best suited to operate on an on-off basis. Those power stations are being given an unfair advantage. That issue was addressed in the Select Committee report, but not in the White Paper.
We have heard not only that British coal is less expensive than the CCGT product, but that it has had large amounts of Government assistance. The Secretary of State said today that it had been given some £17·8 billion worth of subsidy since 1982, but, since 1979, operating grants have represented less than 1 per cent. of Government grants to the coal industry. The money has gone on deficit grants to British Coal, but there have been no deficit grants since 1989. The money has been spent on increased pension costs, social costs, concessionary coal and the like. The grants have cushioned the blow of redundancy, but have not enabled coal to compete with other fuels.
The Government claim to have provided British Coal with an indirect subsidy through price support and the three-year coal contracts agreed after privatisation of the electricity industry; yet, in a formal submission made to the International Atomic Energy Agency, the Government said:
these understandings—
that is, the contracts and the money that was made available to those companies—
are commercial arrangements between the companies
concerned and … contain no element of state aid or price support.
Moreover, the United Kingdom Government have a duty to inform the European Commission of any indirect state aid to the coal industry. According to the Commission, no such aid has been provided by the United Kingdom since 1986.
We find that the central points made by the Secretary of State—that coal is dearer than gas, that productivity is somehow higher when the Conservatives are in power, and that the Government have given substantial amounts of money to the coal industry—have been shown to be completely untrue.
As to the recommendations of the Select Committee report, the Government have said that they support a subsidy, yet not a penny has been given. No figure has been set on the total amount available. Even the so-called subsidy differs from that recommended by the Select Committee, and my hon. Friend the Member for Rother Valley (Mr. Barron) made that point forcefully in his speech.
The Select Committee subsidy was to go to the generators to buy additional coal; the White Paper subsidy is to go to British Coal to enable it to sell coal to the generators. The White Paper subsidy is restricted to the energy market; the Select Committee subsidy was also to go to the industrial market. The figures that have emerged from the coal report today suggest that money is required to give support to industrial users, given their current exodus from the coal market.
To the extent that any figure can be placed on the subsidy, it will certainly not exceed the sum that British Coal, with the encouragement of the Government, is trying to filch from the staff superannuation scheme—a theft which is curently being dealt with by the courts—and we will see what success it has in robbing, Maxwell-style, that pension scheme.
At the heart of our case against the White Paper is not merely the duplicity surrounding the proposal to subsidise but the Government's failure to deal with the basic reasons for coal's inability to compete with gas in a fair market. The Select Committee made several recommendations. It recommended that Nuclear Electric should cease to receive income from the fossil fuel levy, that combined cycled gas turbines should be used as mid-merit or peak instead of baseload capacity, that French electricity imports should cease to be non-leviable, that the Government should provide a subsidy to the electricity generators which should then be required to purchase additional coal and that a subsidy for additional sales in the industrial market should also be provided.
The Committee also recommended that the Government should adopt specific measures to support flue gas desulphurisation and clean coal technologies and should require the generators to hold coal stocks of at least 20 million tonnes. That amount is being held at the moment, and we should like to think that it will be held for some time to come although we know that the generators intend to allow the stocks to fall to about 10 million tonnes.
Such issues are the fault lines of the debate. They are the difference between those who support the Government's position and those who support that of the Select Committee.
In recent months and years, some people have been quizzical about the Government's support for the industry. This evening, we have seen Government Whips running around with bits of paper, putting pressure on hon. Members to speak. One of the individuals who was going to make a most pertinent speech was almost squeezed out and managed to speak only at the very end. In the previous debate, four Conservative Members voted with the Opposition and another four denied the Government their support. There were many who were, I suppose, giving the Government the benefit of the doubt; but we were pretty certain that the Government would not deliver.
We believed that the promise of a subsidy would not be enough to encourage the generators to buy more coal. It was clear to us that the Government would not use their powers to require the generators to maintain the levels of stocks. In that respect, we are waiting to see what the summer brings and what they are prepared to utilise during that period. We were certainly under no illusion

that the Government would do anything to frustrate the attempts of Electricite de France to sell us nuclear power, which has proved to be the case. We were vindicated because we suspected that the Government would do nothing to interfere with the electricity market.
We were now able to see clearly what the Government's intentions were. As someone said today, they intended to get a quick fix. They got it and survived but they now need the continued support of their Back Benchers. This is an opportunity for those who gave the Government their grudging support last time to say that what they have offered since is not good enough, that they have betrayed the trust placed in them and that they have betrayed the coal industry and those who work in it and depend on it. I ask those hon. Members to join my right hon. and hon. Friends and their own hon. Friends in the Lobby to defend our great industry, the coalfield communities and our great national asset, our coal reserves.

The Minister for Energy (Mr. Tim Eggar): In his opening comments, the hon. Member for Clackmannan (Mr. O'Neill) referred to the statement that was made earlier this afternoon. For a moment, I thought that the hon. Gentleman thought that he was still shadow spokesman for defence. I am not surprised that I thought that. because one of the noticeable things about the past few months has been the way in which the hon. Member for Livingston (Mr. Cook) has consistently hogged the airwaves on all energy matters. He really has been the invisible shadow energy spokesman. Looking at the hon. Member for Bolsover (Mr. Skinner) and the other Opposition Members sponsored by the National Union of Mineworkers, I can understand why the hon. Member for Clackmannan has been kept off the Opposition Front Bench on these matters.
When the hon. Member for Clackmannan said something positive, what was he urging? He urged intervention and Government decision taking and rejected any market solution. Having listened to the hon. Gentleman tonight, I can understand why the hon. Member for Caerphilly (Mr. Davies) was on the Opposition Front Bench during the last coal debate.
We have had a good debate and 21 right hon. and hon. Members have spoken—

Mr. Robin Cook: Will the Minister give way?

Mr. Eggar: I will give way to the hon. Gentleman shortly.
The central issue of the debate, to which the hon. Member for Sheffield, Central (Mr. Caborn) referred and which my hon. Friend the Member for Batley and Spen (Mrs. Peacock) mentioned, were the major measures announced by the Government following the report of the Select Committee on Trade and Industry. Following that review and during the period of consultation on the White Paper, many opinions were offered to the Government. However, the one consistent theme was that there was an additional market for coal if only the Government would make available a subsidy to British Coal or to other private sector producers.
We have made that subsidy available. We have not guaranteed an additional market for coal because that is not within our control or within the control of the Select Committee. Nor is it within the control of the private coal


producers or British Coal. We have offered no guarantees. However, we have offered opportunities for additional coal sales and we have made available hundreds of millions of pounds of taxpayers' money to support that.

Mr. Churchill: Will my hon. Friend give way?

Mr. Robin Cook: rose—

Mr. Eggar: I will willingly give way to my hon. Friend.

Mr. Churchill: I am grateful to my hon. Friend. Of course everyone understands that the Government were not able to guarantee a market. However, my right hon. Friend the President of the Board of Trade undertook, on behalf of the Government, to use his best endeavours to secure a wider market for coal. That does not simply need a subsidy—it requires a redressing of the imbalance against coal that is exemplified by the fact that the taxpayer is paying 1·2 billion a year in subsidy to Nuclear Electric, which has a guaranteed market for its output.

Mr. Eggar: I am well aware of my hon. Friend's point. However, the British coal industry receives considerable assistance. This Government have spent £18 billion on the industry since 1979. Every year for the past three years British consumers have paid £1 billion more to pay for electricity by buying British coal than they would have if they had bought electricity generated from imported coal. To say that the market is somehow rigged against coal is simply not accurate.

Mr. Robin Cook: I am most grateful to the Minister for observing the normal courtesies of the Front Bench. May I gently remind him that my hon. Friend the Member for Caerphilly (Mr. Davies) spoke in the last coal debate because the Government put up the Secretary of State for Wales rather than the Minister for Energy to reply to the debate. As the Minister has just assured the House that there is no rigged market, will he answer the question that has remained unanswered since 4 pm? If it is not a rigged market, why is it that the generators will not buy coal at a price that will enable them to provide electricity cheaper than from gas, cheaper than from nuclear power, and cheaper than they can buy it from France? Why not?

Mr. Eggar: The hon. Gentleman has never understood how a market works. He knows perfectly well that the generators and the independent power producers could readily have built new coal-fired stations. They were free to do that. They were free to take advantage of the cheap coal to which the hon. Gentleman refers. The generators have not done that, nor have the independent power producers done it. They have chosen to invest in gas stations. They have done that because they know that, in the present market conditions, gas is a cheaper way of producing electricity than coal is. Many independent decisions have been reached and many people have decided to invest in extra power generation. They have all opted for gas and not for coal. That is the true test of whether coal is competitive.
My hon. Friend the Member for Newark (Mr. Alexander) referred to the redeployment of equipment at Bevercotes. I know of his concern and that of the UDM on this matter. I have been in regular close touch with British Coal on it. I have been assured by the chairman of British Coal that no assets employed at Bevercotes will be redeployed unnecessarily and that the corporation will take each decision to salvage major equipment from those

pits on the basis of all the economic criteria. Of course, that includes the use of that equipment in other pits. [Interruption.]
It is all very well Opposition Members jeering, but this has been a useful debate, and I am trying to answer specific points that have been mentioned.

Mr. Barron: Will the Minister give way?

Mr. Eggar: I will try to refer to some of the points that were made by the hon. Member for Rother Valley (Mr. Barron) in due course.
My hon. Friends the Members for Clywd, North-West (Mr. Richards) and for Batley and Spen referred to the importance of safety considerations. We entirely agree with them. The hon. Member for Wentworth (Mr. Hardy) is also concerned about that matter. We are working very closely with the Health and Safety Commission. I am sure that British Coal will ensure that all proper measures are taken.
The hon. Member for Midlothian (Mr. Clarke) used some extravagant language about the British Coal pension fund. That was rather out of character for the hon. Gentleman. As I have said, there will be no rip-off of the pension funds, either the staff pension fund or the mineworkers' pension fund. The question at issue —

Mr. Frank Dobson: Doing a Robert Maxwell?

Mr. Eggar: It is no good the hon. Member for Holborn and St. Pancras (Mr. Dobson) shouting about Robert Maxwell. I know how close Robert Maxwell was to the Labour party, but on this issue there is no similarity whatsoever, because British Coal and the trustees have agreed that the matter in dispute between them will be considered by the High Court. I am sure that British Coal will adhere to the decision of the High Court on the issue.
The hon. Member for Midlothian and my hon. Friend the Member for Leeds, North-West (Dr. Hampson) referred to help for the British mining equipment industry. I have met representatives of ABMEC, and we are working closely with them on a package of measures that are geared to try to assist their export market and smaller companies.
My hon. Friends the Members for Broxtowe (Mr. Lester) and for Rochford (Dr. Clark) referred to the closure of power stations. They urged that we should take measures to try to ensure that, if they are closed, those power stations are made available to the private sector. I entirely agree with my hon. Friends' wish for greater competition to be developed in electricity generation. I agree that the sale of power stations could be one way of achieving that competition. In the first instance, of course, it is a commercial matter.
I heard what my hon. Friends, including my hon. Friend the Member for Davyhulme (Mr. Churchill), said about the price that is allegedly being asked by the generators. I am watching that matter carefully and I know that the Director General for Electricity Supply is considering the matter. I am sure that the generators will pay attention to the considerable interest that has been expressed in the House on this matter. My hon. Friend the Member for Broxtowe is concerned about the modernisation of coal-fired stations, which will provide a number of opportunities.
My hon. Friend the Member for Rutland and Melton (Mr. Duncan) asked for financial support for management and employee buy-out teams—he especially mentioned the Union of Democratic Mineworkers. We have always made it clear that we want to ensure that any management and employee teams bidding for the industry will have a fair opportunity to bid against other buyers.
I have written to the President of the UDM informing Neil Greatrex that the Government will give support to management and employee buy-out teams that are bidding for the main privatisation. We are prepared to fund up to 50 per cent. of the eligible costs of employing consultants and advisers up to a maximum of £200,000 per team. I am sure that that will be welcomed by the House.

Mr. Duncan: What the Minister has said will give—

Mrs. Peacock: rose—

Mr. Deputy Speaker (Mr. Michael Morris): Order. The hon. Member has been here long enough to know not to intervene when another hon. Member has the floor.

Mr. Duncan: What the Minister said will give enormous comfort to those who have the vision to make the most of the assets that they see and their hard work. On their behalf, I welcome what the Minister said.

Mr. Eggar: I thank my hon. Friend. The UDM and the people of Nottinghamshire will recognise the reaction of Labour Members. They are not interested in the miners of Nottinghamshire having a chance to buy or own those pits. The hon. Member for Sherwood (Mr. Tipping) has kept quiet. I am sure that he is distressed by those Labour Members who are sponsored by the National Union of Mineworkers who do not want the UDM to show this sort of initiative.

Mrs. Peacock: I am listening carefully to what my hon. Friend is saying about help and support for management buy-outs. Can he tell the House what help he will give to private sector investors who want to take over the mines that British Coal wants to close? Those people are not given any help at all except a map reference. That is not good enough.

Mr. Eggar: Some 14 pits have been advertised for licensing to the private sector. I understand that British Coal has received serious expressions of interest for a considerable number of those pits. If my hon. Friend feels that the private sector is in some way being prevented from proceeding with the purchase or leasing of pits, she need only come to me and I will ensure that that matter is properly investigated. That is how it should be.
It is clear from the expression of Labour Members that they do not want miners to be offered the opportunity to work in private sector mines. The only sort of mining they want is in the public sector. They are not interested in jobs for miners or their constituents, or in giving opportunities to individuals. They are simply interested in control by the National Union of Mineworkers and the public sector. The Labour party does not change at all.

Mr. Hardy: Will the Minister give way?

Mr. Eggar: Normally I would give way to the hon. Gentleman, but he was not here earlier, so I hope that he will forgive me for not giving way.
My hon. Friend the Member for Davyhulme commented on the whole issue of coal stocks. I understand his concern about that and I understand the point made by the Select Committee.
We are in discussion with the generators on the appropriate level of stocking. Even the Select Committee's recommended level of 20 million tonnes is nowhere near what is held now. At the moment, 33 million tonnes are held at power stations and an additional 14 million tonnes at the pit heads. Whatever is finally decided about the appropriate stocking level will not have any significant impact on the likely draw down of those stocks, at least in the next few months. One must be realistic about that.
A number of hon. Members spoke about the electricity trade with France. It is no good the right hon. Member for Chesterfield (Mr. Benn) saying that he thought that he entered into that contract because it was a means of exporting coal by wire. Does he really mean that he committed Her Majesty's Government to massive public expenditure without understanding the terms on which the electricity was to flow?
The hon. Members for Livingston and for Clackmannan have consistently urged us to breach international undertakings and to go against the treaty of Rome. They want us to go against all the evidence that was produced for the Select Committee about the legal powers.
The hon. Member for Gordon (Mr. Bruce) gave a typical sitting-on-the-fence Liberal speech, but he did not mention what was said about energy in the Liberal party manifesto. In that manifesto, the hon. Gentleman informed us and the electorate that 45 per cent. of our electricity could be generated by wind power.
Let me tell the House what that actually means. It means that we would need 100,000 windmills, which would take up 25,000 sq km of our country; 10 per cent. of the country would be peopled with windmills. Would the hon. Gentleman offer all Liberal constituencies as a site for a windmill? What would he do if the wind stopped blowing? Would he be able to guarantee that Liberal constituencies would not be denied electricity if that were to happen? Such is the energy policy of the Liberal party.
We know that it is the duty of the Opposition to oppose. We also know that the Labour party is the captive of its history. We know of the power that the NUM-sponsored Members still wield within the parliamentary Labour party. Today, however, the Opposition spokesmen, the hon. Members for Livingston and for Clackmannan owed it to the House to do more than repeat their normal brew of smears, innuendo, half-truths and misrepresentations.
The Labour motion urges that a guaranteed future should be given to the pits, but the Opposition spokesmen said nothing about how that future would be achieved. We heard no word as to which nuclear power stations they wanted to close. We heard nothing about which construction workers for North sea rigs or power stations would lose their jobs. Do the Opposition want Teesside workers or those in north Wales to lose their jobs? Not one jot was said about that.
The Labour party offered no explanation about how it would advocate breaching the terms of the treaty of Rome governing the French interconnector. The Opposition did


not tell us which legally binding contracts they would break. If they want more coal produced, however, such contracts must be broken.
It is worse than that, because the Opposition have not sketched out their long-term vision of Britain's coal industry, except for the hon. Member for Livingston who said that he would oppose its privatisation. He and his hon. Friends have not said whether they would renationalise the industry. The hon. Member for Blyth Valley (Mr. Campbell) is nodding in agreement—[Interruption.]

Mr. Deputy Speaker: Order.

Mr. Caborn: On a point of order. Mr. Deputy Speaker.

Mr. Deputy Speaker: Mr. Caborn—and I hope that it is a genuine point of order.

Mr. Caborn: The views of the Select Committee are being neglected, and the House is being misled. In no way did the Select Committee ask for any contract to be broken.

Mr. Deputy Speaker: That is not a matter for the Chair.

Mr. Derek Foster: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put,put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 286, Noes 308.

Division No. 315]
[10.00 pm


AYES


Abbott, Ms Diane
Campbell, Menzies (Fife NE)


Adams, Mrs Irene
Campbell, Ronnie (Blyth V)


Ainger, Nick
Campbell-Savours, D. N.


Ainsworth, Robert (Cov'try NE)
Canavan, Dennis


Alexander, Richard
Cann, Jamie


Allen, Graham
Carlile, Alexander (Montgomry)


Alton, David
Cash, William


Anderson, Donald (Swansea E)
Chisholm, Malcolm


Anderson, Ms Janet (Ros'dale)
Churchill, Mr


Armstrong, Hilary
Clapham, Michael


Ashton, Joe
Clark, Dr David (South Shields)


Banks, Tony (Newham NW)
Clarke, Eric (Midlothian)


Barnes, Harry
Clarke, Tom (Monklands W)


Barron, Kevin
Clelland, David


Battle, John
Clwyd, Mrs Ann


Bayley, Hugh
Coffey, Ann


Beckett, Rt Hon Margaret
Cohen, Harry


Beith, Rt Hon A. J.
Connarty, Michael


Bell, Stuart
Cook, Frank (Stockton N)


Benn, Rt Hon Tony
Cook, Robin (Livingston)


Bennett, Andrew F.
Corbett, Robin


Benton, Joe
Corbyn, Jeremy


Bermingham, Gerald
Corston, Ms Jean


Berry, Dr. Roger
Cousins, Jim


Betts, Clive
Cox, Tom


Blair, Tony
Cryer, Bob


Blunkett, David
Cummings, John


Boateng, Paul
Cunliffe, Lawrence


Boyce, Jimmy
Cunningham, Jim (Covy SE)


Boyes, Roland
Cunningham, Rt Hon Dr John


Bradley, Keith
Dalyell, Tam


Bray, Dr Jeremy
Darling, Alistair


Brown, Gordon (Dunfermline E)
Davidson, Ian


Brown, N. (N'c'tle upon Tyne E)
Davies, Bryan (Oldham C'tral)


Bruce, Malcolm (Gordon)
Davies, Rt Hon Denzil (Llanelli)


Burden, Richard
Davies, Ron (Caerphilly)


Byers, Stephen
Davis, Terry (B'ham, H'dge H'l)


Caborn, Richard
Denham, John


Callaghan, Jim
Dewar, Donald


Campbell, Mrs Anne (C'bridge)
Dixon, Don





Dobson, Frank
Kilfoyle, Peter


Donohoe, Brian H.
Kinnock, Rt Hon Neil (Islwyn)


Dowd, Jim
Kirkwood, Archy


Dunnachie, Jimmy
Leighton, Ron


Dunwoody, Mrs Gwyneth
Lestor, Joan (Eccles)


Eagle, Ms Angela
Lewis, Terry


Eastham, Ken
Litherland, Robert


Enright, Derek
Lloyd, Tony (Stretford)


Etherington, Bill
Llwyd, Elfyn


Evans, John (St Helens N)
Loyden, Eddie


Ewing, Mrs Margaret
Lynne, Ms Liz


Fatchett, Derek
McAllion, John


Faulds, Andrew
McAvoy, Thomas


Field, Frank (Birkenhead)
McCartney, Ian


Fisher, Mark
Macdonald, Calum


Flynn, Paul
McFall, John


Foster, Rt Hon Derek
McKelvey, William


Foster, Don (Bath)
Mackinlay, Andrew


Foulkes, George
McLeish, Henry


Fraser, John
Maclennan, Robert


Fyfe, Maria
McMaster, Gordon


Galbraith, Sam
McNamara, Kevin


Galloway, George
McWilliam, John


Gapes, Mike
Madden, Max


Garrett, John
Mahon, Alice


George, Bruce
Mandelson, Peter


Gerrard, Neil
Marek, Dr John


Gilbert, Rt Hon Dr John
Marshall, David (Shettleston)


Godman, Dr Norman A.
Marshall, Jim (Leicester, S)


Godsiff, Roger
Martin, Michael J. (Springburn)


Golding, Mrs Llin
Martlew, Eric


Gordon, Mildred
Maxton, John


Gould, Bryan
Meacher, Michael


Graham, Thomas
Meale, Alan


Grant, Bernie (Tottenham)
Michael, Alun


Griffiths, Nigel (Edinburgh S)
Michie, Bill (Sheffield Heeley)


Griffiths, Win (Bridgend)
Milburn, Alan


Grocott, Bruce
Miller, Andrew


Gunnell, John
Mitchell, Austin (Gf Grimsby)


Hain, Peter
Moonie, Dr Lewis


Hall, Mike
Morgan, Rhodri


Hanson, David
Morley, Elliot


Hardy, Peter
Morris, Rt Hon A. (Wy'nshawe)


Harman, Ms Harriet
Morris, Estelle (B'ham Yardley)


Harvey, Nick
Mowlam, Marjorie


Hattersley, Rt Hon Roy
Mudie, George


Henderson, Doug
Mullin, Chris


Heppell, John
Murphy, Paul


Hill, Keith (Streatham)
Oakes, Rt Hon Gordon


Hinchliffe, David
O'Brien, Michael (N W'kshire)


Hoey, Kate
O'Brien, William (Normanton)


Hogg, Norman (Cumbernauld)
O'Hara, Edward


Home Robertson, John
Olner, William


Hood, Jimmy
O'Neill, Martin


Hoon, Geoffrey
Orme, Rt Hon Stanley


Howarth, George (Knowsley N)
Paisley, Rev Ian


Howells, Dr. Kim (Pontypridd)
Patchett, Terry


Hoyle, Doug
Peacock, Mrs Elizabeth


Hughes, Kevin (Doncaster N)
Pendry, Tom


Hughes, Robert (Aberdeen N)
Pickthall, Colin


Hughes, Roy (Newport E)
Pike, Peter L.


Hughes, Simon (Southwark)
Pope, Greg


Hutton, John
Powell, Ray (Ogmore)


Ingram, Adam
Prentice, Gordon (Pendle)


Jackson, Glenda (H'stead)
Prescott, John


Jackson, Helen (Shef'ld, H)
Primarolo, Dawn


Jamieson, David
Purchase, Ken


Janner, Greville
Quin, Ms Joyce


Jones, Barry (Alyn and D'side)
Radice, Giles


Jones, leuan Wyn (Ynys Môn)
Randall, Stuart


Jones, Jon Owen (Cardiff C)
Raynsford, Nick


Jones, Lynne (B'ham S O)
Redmond, Martin


Jones, Martyn (Clwyd, SW)
Reid, Dr John


Jones, Nigel (Cheltenham)
Rendel, David


Jowell, Tessa
Richardson, Jo


Kaufman, Rt Hon Gerald
Robertson, George (Hamilton)


Keen, Alan
Robinson, Geoffrey (Co'try NW)


Kennedy, Charles (Ross,C&amp;S)
Roche, Mrs. Barbara


Kennedy, Jane (Lpool Brdgn)
Rogers, Allan


Khabra, Piara S.
Rooker, Jeff






Rooney, Terry
Taylor, Mrs Ann (Dewsbury)


Ross, Ernie (Dundee W)
Tipping. Paddy


Rowlands, Ted
Turner, Dennis


Ruddock, Joan
Tyler, Paul


Salmond, Alex
Vaz, Keith


Sedgemore, Brian
Walker, Rt Hon Sir Harold


Sheerman, Barry
Wallace, James


Sheldon, Rt Hon Robert
Walley, Joan


Shore, Rt Hon Peter
Wardell, Gareth (Gower)


Short, Clare
Wareing, Robert N


Simpson, Alan
Wicks, Malcolm


Skinner, Dennis
Williams, Rt Hon Alan (Sw'n W)


Smith, Andrew (Oxford E)
Williams, Alan W (Carmarthen)


Smith, C. (Isl'ton S &amp; F'sbury)
Wilson, Brian


Smith, Rt Hon John (M'kl'ds E)
Winnick, David


Smith, Llew (Blaenau Gwent)
Winterton, Mrs Ann (Congleton)


Snape, Peter
Winterton, Nicholas (Macc'f'ld)


Soley, Clive
Wise, Audrey


Spearing, Nigel
Worthington, Tony


Spellar, John
Wray, Jimmy


Steel, Rt Hon Sir David
Young, David (Bolton SE)


Steinberg, Gerry



Stevenson, George
Tellers for the Ayes:


Stott, Roger
Mr. Jack Thompson and Mr. Eric Illsley.


Strang, Dr. Gavin



Straw, Jack





NOES


Ainsworth, Peter (East Surrey)
Channon, Rt Hon Paul


Aitken, Jonathan
Clappison, James


Alison, Rt Hon Michael (Selby)
Clark, Dr Michael (Rochford)


Allason, Rupert (Torbay)
Clifton-Brown, Geoffrey


Amess, David
Coe, Sebastian


Ancram, Michael
Colvin, Michael


Arbuthnot, James
Congdon, David


Arnold, Jacques (Gravesham)
Conway, Derek


Arnold, Sir Thomas (Hazel Grv)
Coombs, Anthony (Wyre For'st)


Ashby, David
Coombs, Simon (Swindon)


Aspinwall, Jack
Cope, Rt Hon Sir John


Atkins, Robert
Couchman, James


Atkinson, David (Bour'mouth E)
Cran, James


Atkinson, Peter (Hexham)
Currie, Mrs Edwina (S D'by'ire)


Baker, Rt Hon K. (Mole Valley)
Curry, David (Skipton &amp; Ripon)


Baker, Nicholas (Dorset North)
Davies, Quentin (Stamford)


Baldry, Tony
Davis, David (Boothferry)


Banks, Matthew (Southport)
Deva, Nirj Joseph


Banks, Robert (Harrogate)
Devlin, Tim


Bates, Michael
Dickens, Geoffrey


Batiste, Spencer
Dicks, Terry


Bellingham, Henry
Dorrell, Stephen


Bendall, Vivian
Douglas-Hamilton, Lord James


Beresford, Sir Paul
Dover, Den


Biffen, Rt Hon John
Duncan, Alan


Blackburn, Dr John G.
Duncan-Smith, Iain


Body, Sir Richard
Dunn, Bob


Bonsor, Sir Nicholas
Durant, Sir Anthony


Booth, Hartley
Dykes, Hugh


Boswell, Tim
Eggar, Tim


Bottomley, Peter (Eltham)
Elletson, Harold


Bottomley, Rt Hon Virginia
Evans, David (Welwyn Hatfield)


Bowden, Andrew
Evans, Jonathan (Brecon)


Bowis, John
Evans, Nigel (Ribble Valley)


Boyson, Rt Hon Sir Rhodes
Evans, Roger (Monmouth)


Brandreth, Gyles
Evennett, David


Brazier, Julian
Faber, David


Bright, Graham
Fabricant, Michael


Brooke, Rt Hon Peter
Fairbairn, Sir Nicholas


Brown, M. (Brigg &amp; Cl'thorpes)
Fenner, Dame Peggy


Browning, Mrs. Angela
Field, Barry (Isle of Wight)


Bruce, Ian (S Dorset)
Fishburn, Dudley


Budgen, Nicholas
Forman, Nigel


Burns, Simon
Forsyth, Michael (Stirling)


Burt, Alistair
Forth, Eric


Butcher, John
Fowler, Rt Hon Sir Norman


Butler, Peter
Fox, Dr Liam (Woodspring)


Butterfill, John
Fox, Sir Marcus (Shipley)


Carlisle, John (Luton North)
Freeman, Rt Hon Roger


Carlisle, Kenneth (Lincoln)
French, Douglas


Carrington, Matthew
Fry, Peter


Carttiss, Michael
Gale, Roger





Gallie, Phil
Maclean, David


Gardiner, Sir George
McLoughlin, Patrick


Garel-Jones, Rt Hon Tristan
McNair-Wilson, Sir Patrick


Garnier, Edward
Madel, David


Gill, Christopher
Maitland, Lady Olga


Gillan, Cheryl
Malone, Gerald


Goodlad, Rt Hon Alastair
Mans, Keith


Goodson-Wickes, Dr Charles
Marland, Paul


Gorman, Mrs Teresa
Marlow, Tony


Gorst, John
Marshall, John (Hendon S)


Grant, Sir Anthony (Cambs SW)
Marshall, Sir Michael (Arundel)


Greenway, Harry (Ealing N)
Martin, David (Portsmouth S)


Greenway, John (Ryedale)
Mates, Michael


Griffiths, Peter (Portsmouth, N)
Mawhinney, Dr Brian


Grylls, Sir Michael
Mellor, Rt Hon David


Gummer, Rt Hon John Selwyn
Merchant, Piers


Hague, William
Milligan, Stephen


Hamilton, Rt Hon Archie (Epsom)
Mitchell, Andrew (Gedling)


Hamilton, Neil (Tatton)
Mitchell, Sir David (Hants NW)


Hampson, Dr Keith
Moate, Sir Roger


Hanley, Jeremy
Monro, Sir Hector


Hannam, Sir John
Montgomery, Sir Fergus


Hargreaves, Andrew
Moss, Malcolm


Harris, David
Nelson, Anthony


Haselhurst, Alan
Neubert, Sir Michael


Hawkins, Nick
Newton, Rt Hon Tony


Hawksley, Warren
Nicholls, Patrick


Hayes, Jerry
Nicholson, Emma (Devon West)


Heald, Oliver
Norris, Steve


Heath, Rt Hon Sir Edward
Onslow, Rt Hon Sir Cranley


Heathcoat-Amory, David
Oppenheim, Phillip


Hendry, Charles
Ottaway, Richard


Hicks, Robert
Page, Richard


Higgins, Rt Hon Sir Terence L.
Paice, James


Hill, James (Southampton Test)
Patnick, Irvine


Hogg, Rt Hon Douglas (G'tham)
Patten, Rt Hon John


Horam, John
Pattie, Rt Hon Sir Geoffrey


Hordern, Rt Hon Sir Peter
Pickles, Eric


Howard, Rt Hon Michael
Porter, Barry (Wirral S)


Howarth, Alan (Strat'rd-on-A)
Porter, David (Waveney)


Howell, Rt Hon David (G'dford)
Powell, William (Corby)


Howell, Sir Ralph (North
Rathbone, Tim


Norfolk)
Redwood, Rt Hon John


Hughes Robert G. (Harrow W)
Renton, Rt Hon Tim


Hunt, Rt Hon David (Wirral W)
Richards, Rod


Hunt, Sir John (Ravensbourne)
Riddick, Graham


Hunter, Andrew
Rifkind, Rt Hon. Malcolm


Jack, Michael
Robathan, Andrew


Jackson, Robert (Wantage)
Roberts, Rt Hon Sir Wyn


Jenkin, Bernard
Robertson, Raymond (Ab'd'n S)


Jessel, Toby
Robinson, Mark (Somerton)


Johnson Smith, Sir Geoffrey
Roe, Mrs Marion (Broxbourne)


Jones, Gwilym (Cardiff N)
Rowe, Andrew (Mid Kent)


Jones, Robert B. (W Hertfdshr)
Rumbold, Rt Hon Dame Angela


Jopling, Rt Hon Michael
Ryder, Rt Hon Richard


Kellett-Bowman, Dame Elaine
Sackville, Tom


Key, Robert
Sainsbury, Rt Hon Tim


Kilfedder, Sir James
Scott, Rt Hon Nicholas


King, Rt Hon Tom
Shaw, David (Dover)


Kirkhope, Timothy
Shaw, Sir Giles (Pudsey)


Knapman, Roger
Shephard, Rt Hon Gillian


Knight, Mrs Angela (Erewash)
Shepherd, Colin (Hereford)


Knight, Greg (Derby N)
Shepherd, Richard (Aldridge)


Knight, Dame Jill (Bir'm E'st'n)
Shersby, Michael


Knox, Sir David
Sims, Roger


Kynoch, George (Kincardine)
Skeet, Sir Trevor


Lait, Mrs Jacqui
Smith, Sir Dudley (Warwick)


Lamont, Rt Hon Norman
Smith, Tim (Beaconsfield)


Lang, Rt Hon Ian
Soames, Nicholas


Lawrence, Sir Ivan
Speed, Sir Keith


Legg, Barry
Spencer, Sir Derek


Leigh, Edward
Spicer, Sir James (W Dorset)


Lennox-Boyd, Mark
Spicer, Michael (S Worcs)


Lidington, David
Spink, Dr Robert


Lilley, Rt Hon Peter
Spring, Richard


Lloyd, Peter (Fareham)
Sproat, lain


Luff, Peter
Squire, Robin (Hornchurch)


Lyell, Rt Hon Sir Nicholas
Stanley, Rt Hon Sir John


MacGregor, Rt Hon John
Steen, Anthony


MacKay, Andrew
Stephen, Michael






Stern, Michael
Waldegrave, Rt Hon William


Stewart, Allan
Walden, George


Streeter, Gary
Waller, Gary


Sumberg, David
Ward, John


Sweeney, Walter
Wardle, Charles (Bexhill)


Sykes, John
Waterson, Nigel


Tapsell, Sir Peter
Watts, John


Taylor, Ian (Esher)
Wells, Bowen


Taylor, John M. (Solihull)
Wheeler, Rt Hon Sir John


Taylor, Sir Teddy (Southend, E)
Whitney, Ray


Temple-Morris, Peter
Whittingdale, John


Thomason, Roy
Widdecombe, Ann


Thompson, Sir Donald (C'er V)
Wiggin, Sir Jerry


Thompson, Patrick (Norwich N)
Wilkinson, John


Thornton, Sir Malcolm
Willetts, David


Thurnham, Peter
Wilshire, David


Townend, John (Bridlington)
Wolfson, Mark


Townsend, Cyril D. (Bexl'yh'th)
Wood, Timothy


Tracey, Richard
Yeo, Tim


Tredinnick, David
Young, Rt Hon Sir George


Trend, Michael



Trotter, Neville
Tellers for the Noes:


Twinn, Dr Ian
Mr. David Lightbown and Mr. Sydney Chapman.


Vaughan, Sir Gerard



Viggers, Peter

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to standing order No. 30 (Question on amendments):—

The House divided: Ayes 307, Noes 285.

Division No. 316]
[10 16 pm


AYES


Ainsworth, Peter (East Surrey)
Butcher, John


Aitken, Jonathan
Butler, Peter


Alison, Rt Hon Michael (Selby)
Butterfill, John


Allason, Rupert (Torbay)
Carlisle, John (Luton North)


Amess, David
Carlisle, Kenneth (Lincoln)


Ancram, Michael
Carrington, Matthew


Arbuthnot, James
Carttiss, Michael


Arnold, Jacques (Gravesham)
Channon, Rt Hon Paul


Arnold, Sir Thomas (Hazel Grv)
Clappison, James


Ashby, David
Clark, Dr Michael (Rochford)


Aspinwall, Jack
Clifton-Brown, Geoffrey


Atkins, Robert
Coe, Sebastian


Atkinson, David (Bour'mouth E)
Colvin, Michael


Atkinson, Peter (Hexham)
Congdon, David


Baker, Rt Hon K. (Mole Valley)
Conway, Derek


Baker, Nicholas (Dorset North)
Coombs, Anthony (Wyre For'st)


Baldry, Tony
Coombs, Simon (Swindon)


Banks, Matthew (Southport)
Cope, Rt Hon Sir John


Banks, Robert (Harrogate)
Couchman, James


Bates, Michael
Cran, James


Batiste, Spencer
Currie, Mrs Edwina (S D'by'ire)


Bellingham, Henry
Curry, David (Skipton &amp; Ripon)


Bendall, Vivian
Davies, Quentin (Stamford)


Beresford, Sir Paul
Davis, David (Boothferry)


Biffen, Rt Hon John
Deva, Nirj Joseph


Blackburn, Dr John G.
Devlin, Tim


Body, Sir Richard
Dickens, Geoffrey


Bonsor, Sir Nicholas
Dicks, Terry


Booth, Hartley
Dorrell, Stephen


Boswell, Tim
Douglas-Hamilton, Lord James


Bottomley, Peter (Eltham)
Dover, Den


Bottomley, Rt Hon Virginia
Duncan, Alan


Bowden, Andrew
Duncan-Smith, lain


Bowis, John
Dunn, Bob


Boyson, Rt Hon Sir Rhodes
Durant, Sir Anthony


Brandreth, Gyles
Dykes, Hugh


Brazier, Julian
Eggar, Tim


Bright, Graham
Elletson, Harold


Brooke, Rt Hon Peter
Evans, David (Welwyn Hatfield)


Brown, M. (Brigg &amp; Cl'thorpes)
Evans, Jonathan (Brecon)


Browning, Mrs. Angela
Evans, Nigel (Ribble Valley)


Bruce, Ian (S Dorset)
Evans, Roger (Monmouth)


Budgen, Nicholas
Evennett, David


Burns, Simon
Faber, David


Burt, Alistair
Fabricant, Michael





Fairbairn, Sir Nicholas
Lamont, Rt Hon Norman


Fenner, Dame Peggy
Lang, Rt Hon Ian


Field, Barry (Isle of Wight)
Lawrence, Sir Ivan


Fishburn, Dudley
Legg, Barry


Forman, Nigel
Leigh, Edward


Forsyth, Michael (Stirling)
Lennox-Boyd, Mark


Forth, Eric
Lidington, David


Fowler, Rt Hon Sir Norman
Lightbown, David


Fox, Dr Liam (Woodspring)
Lilley, Rt Hon Peter


Fox, Sir Marcus (Shipley)
Lloyd, Peter (Fareham)


Freeman, Rt Hon Roger
Luff, Peter


French, Douglas
Lyell, Rt Hon Sir Nicholas


Fry, Peter
MacGregor, Rt Hon John


Gale, Roger
MacKay, Andrew


Gallie, Phil
Maclean, David


Gardiner, Sir George
McLoughlin, Patrick


Garel-Jones, Rt Hon Tristan
McNair-Wilson, Sir Patrick


Gamier, Edward
Madel, David


Gill, Christopher
Maitland, Lady Olga


Gillan, Cheryl
Malone, Gerald


Goodlad. Rt Hon Alastair
Mans, Keith


Goodson-Wickes, Dr Charles
Marland. Paul


Gorman, Mrs Teresa
Marlow, Tony


Gorst, John
Marshall, John (Hendon S)


Grant, Sir Anthony (Cambs SW)
Marshall, Sir Michael (Arundel)


Greenway, Harry (Ealing N)
Martin, David (Portsmouth S)


Green way, John (Ryedale)
Mates, Michael


Griffiths, Peter (Portsmouth, N)
Mawhinney, Dr Brian


Grylls, Sir Michael
Mellor, Rt Hon David


Gummer, Rt Hon John Selwyn
Merchant, Piers


Hague, William
Milligan, Stephen


Hamilton, Rt Hon Archie (Epsom)
Mitchell, Andrew (Gedling)


Hamilton, Neil (Tatton)
Mitchell, Sir David (Hants NW)


Hampson, Dr Keith
Moate, Sir Roger


Hanley, Jeremy
Monro, Sir Hector


Hannam, Sir John
Montgomery, Sir Fergus


Hargreaves, Andrew
Moss, Malcolm


Harris, David
Nelson, Anthony


Haselhurst, Alan
Neubert, Sir Michael


Hawkins. Nick
Newton, Rt Hon Tony


Hawksley, Warren
Nicholls, Patrick


Hayes, Jerry
Nicholson, Emma (Devon West)


Heald, Oliver
Norris, Steve


Heath, Rt Hon Sir Edward
Onslow, Rt Hon Sir Cranley


Heathcoat-Amory, David
Oppenheim, Phillip


Hendry, Charles
Ottaway, Richard


Hicks, Robert
Page, Richard


Higgins, Rt Hon Sir Terence L.
Paice, James


Hill, James (Southampton Test)
Patnick, Irvine


Hogg, Rt Hon Douglas (G'tham)
Patten, Rt Hon John


Horam, John
Pattie, Rt Hon Sir Geoffrey


Hordern, Rt Hon Sir Peter
Pickles, Eric


Howard, Rt Hon Michael
Porter, Barry (Wirral S)


Howarth, Alan (Strat'rd-on-A)
Porter, David (Waveney)


Howell, Rt Hon David (Gdford)
Powell, William (Corby)


Howell, Sir Ralph (North
Rathbone, Tim


Norfolk)
Redwood, Rt Hon John


Hunt, Rt Hon David (Wirral W)
Renton, Rt Hon Tim


Hunt, Sir John (Ravensbourne)
Richards, Rod


Hunter, Andrew
Riddick, Graham


Jack, Michael
Rifkind, Rt Hon. Malcolm


Jackson, Robert (Wantage)
Robathan, Andrew


Jenkin, Bernard
Roberts, Rt Hon Sir Wyn


Jessel, Toby
Robertson, Raymond (Ab'd'n S)


Johnson Smith, Sir Geoffrey
Robinson, Mark (Somerton)


Jones, Gwilym (Cardiff N)
Roe, Mrs Marion (Broxbourne)


Jones, Robert B. (W Hertfdshr)
Rowe, Andrew (Mid Kent)


Jopling, Rt Hon Michael
Rumbold, Rt Hon Dame Angela


Kellett-Bowman, Dame Elaine
Ryder, Rt Hon Richard


Key, Robert
Sackville, Tom


Kilfedder, Sir James
Sainsbury, Rt Hon Tim


King, Rt Hon Tom
Scott, Rt Hon Nicholas


Kirkhope, Timothy
Shaw, David (Dover)


Knapman, Roger
Shaw, Sir Giles (Pudsey)


Knight, Mrs Angela (Erewash)
Shephard, Rt Hon Gillian


Knight, Greg (Derby N)
Shepherd, Colin (Hereford)


Knight, Dame Jill (Bir'm E'st'n)
Shepherd, Richard (Aldridge)


Knox, Sir David
Shersby, Michael


Kynoch, George (Kincardine)
Sims, Roger


Lait, Mrs Jacqui
Skeet, Sir Trevor






Smith, Sir Dudley (Warwick)
Tracey, Richard


Smith, Tim (Beaconsfield)
Tredinnick, David


Soames, Nicholas
Trend, Michael


Speed, Sir Keith
Trotter, Neville


Spencer, Sir Derek
Twinn, Dr Ian


Spicer, Sir James (W Dorset)
Vaughan, Sir Gerard


Spicer, Michael (S Worcs)
Viggers, Peter


Spink, Dr Robert
Waldegrave, Rt Hon William


Spring, Richard
Walden, George


Sproat, Iain
Waller, Gary


Squire, Robin (Hornchurch)
Ward, John


Stanley, Rt Hon Sir John
Wardle, Charles (Bexhill)


Steen, Anthony
Waterson, Nigel


Stern, Michael
Watts, John


Stewart, Allan
Wells, Bowen


Streeter, Gary
Wheeler, Rt Hon Sir John


Sumberg, David
Whitney, Ray


Sweeney, Walter
Whittingdale, John


Sykes, John
Widdecombe, Ann


Tapsell, Sir Peter
Wiggin, Sir Jerry


Taylor, Ian (Esher)
Wilkinson, John


Taylor, John M. (Solihull)
Willetts, David


Taylor, Sir Teddy (Southend, E)
Wilshire, David


Temple-Morris, Peter
Wolfson, Mark


Thomason, Roy
Wood, Timothy


Thompson, Sir Donald (C'er V)
Yeo, Tim


Thompson, Patrick (Norwich N)
Young, Rt Hon Sir George


Thornton, Sir Malcolm



Thurnham, Peter
Tellers for the Ayes:


Townend, John (Bridlington)
Mr. Sydney Chapman and Mr. Robert G. Hughes.


Townsend, Cyril D. (Bexl'yh'th)





NOES


Abbott, Ms Diane
Chisholm, Malcolm


Adams, Mrs Irene
Churchill, Mr


Ainger, Nick
Clapham, Michael


Ainsworth, Robert (Cov'try NE)
Clark, Dr David (South Shields)


Alexander, Richard
Clarke, Eric (Midlothian)


Allen, Graham
Clarke, Tom (Monklands W)


Alton, David
Clelland, David


Anderson, Donald (Swansea E)
Clwyd, Mrs Ann


Anderson, Ms Janet (Ros'dale)
Coffey, Ann


Armstrong, Hilary
Cohen, Harry


Ashton, Joe
Connarty, Michael


Banks, Tony (Newham NW)
Cook, Frank (Stockton N)


Barnes, Harry
Cook, Robin (Livingston)


Barron, Kevin
Corbett, Robin


Battle, John
Corbyn, Jeremy


Bayley, Hugh
Corston, Ms Jean


Beckett, Rt Hon Margaret
Cousins, Jim


Beith, Rt Hon A. J.
Cox, Tom


Bell, Stuart
Cryer, Bob


Benn, Rt Hon Tony
Cummings, John


Bennett, Andrew F.
Cunliffe, Lawrence


Benton, Joe
Cunningham, Jim (Covy SE)


Bermingham, Gerald
Cunningham, Rt Hon Dr John


Berry, Dr. Roger
Dalyell, Tam


Betts, Clive
Darling, Alistair


Blair, Tony
Davidson, Ian


Blunkett, David
Davies, Bryan (Oldham C'tral)


Boateng, Paul
Davies, Rt Hon Denzil (Llanelli)


Boyce, Jimmy
Davies, Ron (Caerphilly)


Boyes, Roland
Davis, Terry (B'ham, H'dge H'I)


Bradley, Keith
Denham, John


Bray, Dr Jeremy
Dewar, Donald


Brown, Gordon (Dunfermline E)
Dixon, Don


Brown, N. (N'c'tle upon Tyne E)
Dobson, Frank


Bruce, Malcolm (Gordon)
Donohoe, Brian H.


Burden, Richard
Dowd, Jim


Byers, Stephen
Dunnachie, Jimmy


Caborn, Richard
Dunwoody, Mrs Gwyneth


Callaghan, Jim
Eagle, Ms Angela


Campbell, Mrs Anne (C'bridge)
Eastham, Ken


Campbell, Menzies (Fife NE)
Enright, Derek


Campbell, Ronnie (Blyth V)
Etherington, Bill


Campbell-Savours, D. N.
Evans, John (St Helens N)


Canavan, Dennis
Ewing, Mrs Margaret


Cann, Jamie
Fatchett, Derek


Carlile, Alexander (Montgomry)
Faulds, Andrew


Cash, William
Field, Frank (Birkenhead)





Fisher, Mark
Macdonald, Calum


Flynn, Paul
McFall, John


Foster, Rt Hon Derek
McKelvey, William


Foster, Don (Bath)
Mackinlay, Andrew


Foulkes, George
McLeish, Henry


Fraser, John
Maclennan, Robert


Fyfe, Maria
McMaster, Gordon


Galbraith, Sam
McNamara, Kevin


Galloway, George
McWilliam, John


Gapes, Mike
Madden, Max


Garrett, John
Mahon, Alice


George, Bruce
Mandelson, Peter


Gerrard, Neil
Marek, Dr John


Gilbert, Rt Hon Dr John
Marshall, David (Shettleston)


Godman, Dr Norman A.
Marshall, Jim (Leicester, S)


Godsiff, Roger
Martin, Michael J. (Springburn)


Golding, Mrs Llin
Martlew, Eric


Gordon, Mildred
Maxton, John


Gould, Bryan
Meacher, Michael


Graham, Thomas
Meale, Alan


Grant, Bernie (Tottenham)
Michael, Alun


Griffiths, Nigel (Edinburgh S)
Michie, Bill (Sheffield Heeley)


Griffiths, Win (Bridgend)
Milburn, Alan


Grocott, Bruce
Miller, Andrew


Gunnell, John
Mitchell, Austin (Gf Grimsby)


Hain, Peter
Moonie, Dr Lewis


Hall, Mike
Morgan, Rhodri


Hanson, David
Morley, Elliot


Hardy, Peter
Morris, Rt Hon A. (Wy'nshawe)


Harman, Ms Harriet
Morris, Estelle (B'ham Yardley)


Harvey, Nick
Mowlam, Marjorie


Hattersley, Rt Hon Roy
Mudie, George


Henderson, Doug
Mullin, Chris


Heppell, John
Murphy, Paul


Hill, Keith (Streatham)
Oakes, Rt Hon Gordon


Hinchliffe, David
O'Brien, Michael (N W'kshire)


Hoey, Kate
O'Brien, William (Normanton)


Hogg, Norman (Cumbernauld)
O'Hara, Edward


Home Robertson, John
Olner, William


Hood, Jimmy
O'Neill, Martin


Hoon, Geoffrey
Orme, Rt Hon Stanley


Howarth, George (Knowsley N)
Paisley, Rev Ian


Howells, Dr. Kim (Pontypridd)
Patchett, Terry


Hoyle, Doug
Peacock, Mrs Elizabeth


Hughes, Kevin (Doncaster N)
Pendry, Tom


Hughes, Robert (Aberdeen N)
Pickthall. Colin


Hughes, Roy (Newport E)
Pike, Peter L.


Hughes, Simon (Southwark)
Pope, Greg


Hutton, John
Powell, Ray (Ogmore)


Ingram, Adam
Prentice, Gordon (Pendle)


Jackson, Glenda (H'stead)
Prescott, John


Jackson, Helen (Shef'Id, H)
Primarolo, Dawn


Jamieson, David
Purchase, Ken


Janner, Greville
Quin, Ms Joyce


Jones, Barry (Alyn and D'side)
Radice, Giles


Jones, Ieuan Wyn (Ynys Môn)
Randall, Stuart


Jones, Jon Owen (Cardiff C)
Raynsford, Nick


Jones, Lynne (B'ham S O)
Redmond, Martin


Jones, Martyn (Clwyd, SW)
Reid, Dr John


Jones, Nigel (Cheltenham)
Rendel, David


Jowell, Tessa
Richardson, Jo


Kaufman, Rt Hon Gerald
Robertson, George (Hamilton)


Keen, Alan
Robinson, Geoffrey (Co'try NW)


Kennedy, Charles (Ross.C&amp;S)
Roche, Mrs. Barbara


Kennedy, Jane (Lpool Brdgn)
Rogers, Allan


Khabra, Piara S.
Rooker, Jeff


Kilfoyle, Peter
Rooney, Terry


Kinnock, Rt Hon Neil (Islwyn)
Ross, Ernie (Dundee W)


Kirkwood, Archy
Rowlands, Ted


Leighton, Ron
Ruddock, Joan


Lestor, Joan (Eccles)
Salmond, Alex


Lewis, Terry
Sedgemore, Brian


Litherland, Robert
Sheerman, Barry


Lloyd, Tony (Stretford)
Sheldon, Rt Hon Robert


Llwyd, Elfyn
Shore, Rt Hon Peter


Loyden, Eddie
Short, Clare


Lynne, Ms Liz
Simpson, Alan


McAllion, John
Skinner, Dennis


McAvoy, Thomas
Smith, Andrew (Oxford E)


McCartney, Ian
Smith, C. (Isl'ton S &amp; F'sbury)






Smith, Rt Hon John (M'kl'ds E)
Wallace, James


Smith, Llew (Blaenau Gwent)
Walley, Joan


Snape, Peter
Wardell, Gareth (Gower)


Soley, Clive
Wareing, Robert N


Spearing, Nigel
Wicks, Malcolm


Spellar, John
Williams, Rt Hon Alan (Sw'n W)


Steel, Rt Hon Sir David
Williams, Alan W (Carmarthen)


Steinberg, Gerry
Wilson, Brian


Stevenson, George
Winnick, David


Stott, Roger
Wise, Audrey


Strang, Dr. Gavin
Worthington, Tony


Straw, Jack
Wray, Jimmy


Taylor, Mrs Ann (Dewsbury)
Young, David (Bolton SE)


Tipping, Paddy



Turner, Dennis
Tellers for the Noes:


Tyler, Paul
Mr. Jack Thompson and Mr. Eric Illsley.


Vaz, Keith



Walker, Rt Hon Sir Harold

Question accordingly agreed to.

Mr. Deputy Speaker: forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the Government's acceptance of the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237), and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation, the wide ranging package of measures to assist the regeneration of coal field areas, the commitment by British Coal that they will offer to the private sector pits which they do not themselves wish to keep in production, and the Government's intention to bring forward as rapidly as possible the legislation necessary to privatise British Coal.

Orders of the Day — Coal Sales (Financial Assistance)

The Minister for Energy (Mr. Tim Eggar): I beg to move,
That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, sums exceeding £10 million in total but not exceeding £120 million in total to support sales of coal produced from underground mines in the United Kingdom.

Mr. Kevin Barron: In our earlier debate, I tried to get an answer to a question but no response was forthcoming in the Minister's reply. In a letter to hon. Members dated 28 June, the chairman of the British Coal Corporation said that British Coal had
made a very competitively priced offer to the generators for additional sales",
which had been rejected. The Minister said five days earlier that no one had actually asked for the subsidy to secure additional sales for British Coal. Could he tell us whether, when British Coal asked the generators, it knew how much per gigajoule the subsidy would be, or whether it was trying to negotiate with the generators without knowing how much the subsidy would be?

Mr. Eggar: Nobody knows what the level of subsidy is. I am sure that the hon. Gentleman will have noted from the parliamentary answer that I gave about two weeks ago that we have asked for a response both from British Coal and from private sector coal producers to assist us in setting the level of subsidy. To paraphrase my answer, we have basically asked for information regarding the world price of coal as they perceive it—as the hon. Gentleman will understand, there is a dispute about the level of the world price of coal.
We have asked producers for an indication of what their production costs are and, on that basis, we should like to proceed to set the level of subsidy that is available. I apologise for not being able to address the hon. Gentleman's point in my earlier remarks, but I can assure him that it was not a valid one, because there has as yet been no application for subsidy from British Coal.

Mr. Barron: Is the Minister telling the House that British Coal did not have the subsidy when it tried to negotiate additional sales and made the offer that has fallen through and been rejected by National Power, and probably also by PowerGen?

Mr. Eggar: I can tell the hon. Gentleman that, by definition, British Coal did not know the level of the subsidy when it entered into whatever commercial negotiations it entered into with National Power. He has only to look at the answer that I gave.
The House will be aware that the White Paper outlined the Government's intention to offer financial support both to British Coal and to private sector coal producers who could secure a genuinely additional market for United Kingdom underground coal for electricity generation at world-related prices, where that was consistent with the relevant European Community provision. The Government propose to provide that support under section 8 of the Industrial Development Act 1982. At this stage, I propose to set the limit for expenditure on the subsidy at £120 million.

Mr. Mark Fisher: Will the Minister make sure that he explains to the House how the subsidy works, in terms both of timing and of prior knowledge? He appeared to be saying to my hon. Friend the Member for Rother Valley (Mr. Barron) that, at the time of negotiation with the generators, the scale of the subsidy is not known. That being so, how can anyone wishing to take advantage of the subsidy know what its value is?

Mr. Eggar: I understand the point that the hon. Gentleman is making. Further exploration is needed. As I am sure the hon. Gentleman understands, there is a genuine difference of view about the world price of coal.

Mr. Barron: indicated dissent.

Mr. Eggar: It is no good the hon. Gentleman shaking his head. We have received representations from a number of different parties arguing about the world price. There are genuinely conflicting views, and much depends on what one factors in for transport costs and so on. In order to assist us with setting the level of subsidy, we have asked for information not only on what people perceive the world price to be—the House will understand the difference between spot and contact prices and so on—but also on production costs, because, as the Government and the Select Committee have repeatedly said, the subsidy is the difference between the world price and the production cost. At this stage we are waiting for additional information.

Mr. Dennis Skinner: We know that at least two of the 12 market-tested pits have been closed as a result of all the shenanigans that have gone on. What will happen to the other 10? We cannot afford to wait a long time. There was speculation that, without this debate, British Coal would close one of those pits on each day of the miners' conference. This debate probably helped to prevent that for a while.
Here we have 10 pits that are still in the market-tested regime—we think. Let us assume that they want to take advantage of what is now a fairly favourable world market for British coal. We can argue about the price per gigajoule and all the rest, but we are close to it and better in many cases. The game will be finished before the end of the year for those 10 pits, so what is the procedure to ensure that miners and management can keep them open? The Minister must tell us exactly what the procedure is for ensuring that subsidy is paid so that they can get some of the extra market.

Mr. Eggar: The hon. Gentleman's assertion that there is little difference between the production cost of some pits and the world price is probably not correct.

Mr. Skinner: Some of the pits are excellent.

Mr. Eggar: I quote from memory, because I do not have the figures exactly to hand, but I think that it is fair to say that the lowest cost deep-mined pit in the United Kingdom is the Selby complex, which is producing coal at slightly above £1 a gigajoule. Depending on the adjustment that one makes for the calorific value of our coal compared with world coal, and for such matters as chlorine and sulphur content, it is generally felt that the world price landed at ports is quite considerably less than

£1 a gigajoule, although there is an argument about whether that is spot or contract prices. Transport costs must be considered as well.
A difficult and complicated assessment must be made to arrive at the world price. [Interruption.] This is a very difficult and important area. The hon. Member for Bolsover (Mr. Skinner) asked a perfectly reasonable question, and I am trying to answer it.
When private sector producers or British Coal have secured additional contracts or are advanced in their negotiations, they will provide the Government with the information for which we have asked—there is nothing to stop them providing it in advance—and we will consider each case on its merits. We shall bear in mind what the Select Committee said about the appropriate level of subsidy and make a decision in the light of that. We shall want to listen carefully to what British Coal and the private sector producers have to say.

Mr. Fisher: rose—

Mr. Eggar: I do not know whether the hon. Gentleman wants to make a speech, but it may help if I deal with questions in replying to the debate.

Mr. Fisher: rose—

Mr. Eggar: If the hon. Gentleman still wants to intervene, I shall, of course, give way.

Mr. Fisher: The Minister has given us some idea of how the procedure works. Is he telling the House that it is the procedure that operated on the occasion referred to by Mr. Neil Clarke in his letter to hon. Members? He wrote:
We made a very competitively priced offer to the generators for additioanl sales".
That offer was rejected by National Power.
Is the Minister saying that the generators came to him in the way that he has just described to the House? Has the procedure that he has described every been put into effect, and was it put into effect on that occasion?

Mr. Eggar: I thought that I had made the position clear; I apologise if I did not. British Coal has not come to us, and I think, although I am not certain—[Interruption.] I am trying to be helpful. I am sure that the hon. Member for Rother Valley (Mr. Barron) will make his own speech if he wishes; I shall try to pick up his points after that.
British Coal did not come to us. This is a commercial matter between British Coal and the power generators, and I understand that British Coal made an approach to the generators before the Government made clear what system they would adopt—in an answer to a parliamen-tary question from, I believe, my hon. Friend the Member for Norwich, North (Mr. Thompson).
Before I was interrupted, I was saying that we proposed to set the limit for expenditure on the subsidy at £120 million. Let me add, for the avoidance of doubt, that I intend to return to the House for further authorisation for funding if and when additional finance is required, because of the size of the subsidy.
As I have said, I shall seek leave of the House to answer any further points. I commend the motion to the House.

Mr. Derek Enright: The constituency that I have the honour to represent is synonymous with the history of coal. Every village in that constituency started, in mediaeval times, as a small farming community,


developed a coal industry in the same period but was thoroughly exploited in the last century. Houses, roads and railways were built deliberately to provide for their lordships' coal, as it then was. Now there is only one pit left in an area that used to have more pitheads than any other English constituency, and that pit is under threat.
I do not want to repeat arguments that have already been adduced, but I feel that neither the Secretary of State nor the Minister has answered some of our questions. We have been talking specifically about the market. The Secretary of State spoke of what had happened under Labour and Conservative Governments, which was not helpful to the future of coal; if we are looking at history, we should try to draw some lessons from it. The lesson that we have drawn from the throwing away of coal is that the market does work; the Arabs cornered oil and made the price shoot up, because they controlled it. That was a world market—a market that we must guard against; but we will guard against it only through the diversity of the supplies that we produce.
As was said by the right hon. Member for Selby (Mr. Alison)—who is not known for his left-wing views—every reliable international study shows that, at the turn of the current century, the main energy source throughout the world will indeed be coal, and perish those who have not sufficient coal to deal with the markets then. It does not matter whether it has a particular subsidy; the point is, into what sort of market are we selling?
We are in danger of selling into a market that we cannot control. That is one of the problems with British Coal. We have said often enough, and, to be fair, some Conservative Members have repeated it, that the quality of British Coal's top management is not what it should be, certainly not when it comes to finding the markets they could for exports. The markets are there, but British Coal is not attempting to do anything about them, with or without a subsidy. Neil Clarke's expertise lies in spot selling worldwide. He is used to selling uranium and massive amounts of various ores. That is where his mining interest is to be found, and it is a dangerous example for the market with which we are concerned.
The motion implies that the provison of a subsidy to coal is a charity handout, but there have already been handouts. People no longer recall the dash for gas. Let us not forget that British Gas was willing to sell to the electricity supply industry at its price, what it called an economic price that was in British Gas's commercial interests. Against its judgment of the marketplace and despite what the market would take, British Gas was compelled to sell gas more cheaply, although it had a perfectly good reason for not doing so. Incidentally, there are many good reasons why it should maintain a monopoly, but that is a subject for a different debate. The argument is that, as the chairman of British Gas clearly said, one should not be compelled to sell at a price that is uncommercial.
Let us consider the strange way in which the pits were deemed to be economic and how it was decided whether they needed a subsidy. The Minister will no doubt say that Houghton Main has to be taken with Grimethorpe, but let me deal in more detail with the two pits with which I have been closely associated. John T. Boyd, a company not known for its affiliations to left-wing causes, produced a report for the Government. I could read out all the references to Grimethorpe, as they make excellent reading, but I shall mention only the salient points.
The first is that Grimethorpe already had
a positive cash flow of £1·668 million",
which is a lot of money. The report also states:
On an economic basis Grimethorpe has the potential to operate as a stand-alone colliery".
That is important, because the Minister has regularly talked about putting it together with Houghton. There are certainly shared facilities, but it is possible for the two collieries to operate without them with some technical alterations.
I shall wait until the Minister is ready before saying that, in agreeing to knocking out Grimethorpe straight away, the Government and British Coal showed bad faith to British Coal's customers. When one is trying to sell coal, it is bad to say that one does not care about those whom one is supplying. The first that the industrial customers —the majority of Grimethorpe's customers were industrial customers—knew about their coal supply being stopped was on the news. Only if they happened to listen to the news did they hear about it. What sort of commercial sense is that? What sort of management is that? What is more, firms previously supplied by Grimethorpe are now paying more for their fuel. That is a funny sort of marketplace and a funny sort of subsidy.
Frickley is the last remaining pit in my constituency. The Government brought in Rothschild—eminent bankers, indeed. Rothschild said that Frickley was among the most profitable pits. It recommended, "Sell it off and whizz it out for privatisation." It recommended that Frickley should be on the front shelf for everyone to shop for. However, Frickley mysteriously appears on the Government's list of 21 pits. The only reason for Frickley's inclusion is that Frickley pit was very loyal to the National Union of Mineworkers.
I have not traditionally been a believer in conspiracy theories. However, my right hon. Friend the Member for Chesterfield (Mr. Benn) has referred to the political dimension. That point is made in The Times so it must be correct. The Times stated:
Clarke to undermine the miners.
Brian Crozier describes what happened. What is particularly sinister is the private army he formed prior to the 1979 election when he met the then shadow Cabinet. That was when the plotting started against the miners. That is indeed sinister. There is no justification in economic or energy terms for getting rid of Frickley.
I regret to say that, in the earlier debate, no mention was made of the package—as the Government call it—to help areas like mine. I would be only too happy if that help were given. Let us consider the RECHAR money. Contrary to what the Government say, a lot of the money being spent on the coal industry and the regeneration of coal industry areas does not come from the Government; it comes from the European Community.
Between July 1990 and December 1993, almost £12 million-worth of schemes in the Wakefield metropolitan district area were approved. They are licensed and approved and there is no nonesense about that. However, as a result of the Government's shilly-shallying, so close to December 1993, Wakefield has received only £862,043. That is a disgrace. If the Government intend to bring in emergency action, what kind of resolution does that show and what kind of signal does it send? In addition, we do not have assisted area status, when we have one of the largest concentrations of unemployment in Yorkshire.
One hundred years ago, on 7 September, the Featherstone massacre occurred. James Gibbs and James

Duggan were shot by an army sent in by a Tory Government. The Tory Government are not going to send in an army now; they are killing us bit by bit, slice by slice. It is the massacre of the innocents.

Mr. A. J. Beith: In the previous debate, my hon. Friend the Member for Gordon (Mr. Bruce) set out his conviction and mine that the Government lack any coherent policy for the coal industry and have failed to set coal in the framework of a sensible energy policy.
I want to consider the matter from the slightly narrower perspective of my constituency where we have the only remaining pit in the Northumberland coalfield. I have seen three pit closures there in my time as a Member of Parliament and several more before that. So far as I can establish, my constituency produces more opencast coal than any other constituency in the United Kingdom and there are many more opencast coal applications hanging over my constituency.
The subsidy that we are discussing must be one of the most ingenious ever devised. I am convinced that someone in the Department of Trade and Industry must have sold it to the Treasury on the basis that the Treasury would not have to pay out very much of it and that it could be accepted on the basis that the prospect of having to pay it was pretty limited. It was a device to get the Government off a political hook, and it was based on the fiction that, somehow, the market conditions had been substantially changed by the creation of the subsidy.
The subsidy alone does not change those market conditions. Indeed, it has about it an air of impermanence which is greater than that which surrounds the other features of the market, even though there might also be some uncertainty about them. Among the other features of the market, I include the substantial investment by the regional electricity companies in gas generation and the peculiar position of the nuclear industry.
There is a stronger sense of permanence about the consequences of the investment in gas generation. Clearly, a generator which sees a profit stream coming from the generation is much less concerned about the price that it will have to pay for electricity. That situation already exists, and it will continue throughout the working life of the generating unit in which the regional electricity companies have invested. We have something which, from their point of view, looks a rather better long-term bet than the possibility that they might buy some coal at a price which was brought to the world price by a Government subsidy. Indeed, all the incentives are for them to use the generating capacity in which they have invested, even if the purchase price is higher.
The subsidy does not change that market position. It does not alter that advantage, which is protected by the monopoly power of the regional electricity companies as distributors of electricity to the households of their region. That power has been unabated by the regulator, who, in a very cavalier way, has accepted that the decisions made by the regional electricity companies to invest in that gas capacity were reasonable at the time that they were made. I do not think that that was a proper use of his powers. However, whether I like it or not, it is now a fact that the regional electricity companies' ability to use their monopoly to protect that use of gas has been effectively confirmed by the regulator. Just how far he will allow them to push up the price in response remains to be seen, but so far he has given all the indications of a toothless watchdog. That crucial part of the market is rigged against coal, even when the subsidy is applied to it.
The nuclear section of the market is protected by the non-fossil fuel obligation and by the substantial subsidy of the nuclear levy. The nuclear levy has taken a very interesting but extremely worrying turn. It was made clear in discussions in the Select Committee that that subsidy is being used to finance the expansion of nuclear generation at Sizewell.
The Secretary of State, who, unfortunately, is out of action because of his heart attack, made it clear to the House that he thought that that subsidy was entirely for the benefit of the environment, to be applied to decommissioning for purely environmental reasons. It is not. It has been seized by Nuclear Electric in order to fund its current expansion. It is being misapplied by Nuclear Electric. The argument that it used to defend that action is that it is better off doing that than putting the money into a building society. That is an extremely doubtful proposition in the case of building a nuclear power station at Sizewell. The building society, in any normal market, would have been a better bet.
Today, of course, we were reminded that there is an even more absurd element, which is that French-generated nuclear electricity, purchased and brought through the interconnector, benefits from the levy. What inquiries have the Government made into whether French electricity generators intend to use the benefit that they gain from the nuclear levy for decommissioning purposes when they commission their power stations? I do not think that there is any likelihood at all that that will be done.
The argument is blown into smithereens. It is obviously not effectively a ring-fenced sum to be used for decommissioning purposes, which in itself, incidentally, is still a very powerful subsidy to the nuclear industry. It is being used as an operating subsidy for the nuclear industry on a considerable scale. But that subsidy exists alongside a piece of market protection in the non-fossil fuel obligation. The subsidy will not change the fundamental market position.
Ellington colliery is not one of the dozen pits on the original list—it is one of the so-called core pits and is left to maintain its own market. Its market depends crucially on two things. First, it depends on electricity generation at the Blyth power station. Blyth is an old power station, but it is still working effectively. However, a threat hangs permanently over it. Secondly, the market depends on the electricity that is generated for the Alcan smelter. The coal for that smelter is supplied directly by conveyor from the Ellington colliery to the plant.
If either of those markets were to go, the future of Ellington would wholly depend on British Coal finding a further market for coal, jostling alongside all the other claims on that further market from whatever is left of the original 12 pits. Earlier, we discussed the fate of those 12 pits.
As my hon. Friend the Member for Gordon pointed out earlier, there is not much evidence that British Coal is doing well at seeking out that market. It seems to be dominated by a mentality of retrenchment and shrinkage, not one of going out aggressively to seek the market. I make that criticism against the background that, in domestic terms, the market is rigged against the pits.
I wondered whether we would get any announcement today about the future of British Coal, but the debate was marked by the total absence of announcements from the Government about anything at all. Indeed, it was not until we started to debate this subsidy that the Minister showed


some signs of wishing to deal directly with questions from hon. Members and to tell us something. During the previous debate, we heard nothing from the Government that gave us increased confidence in the ability of British Coal to find a larger market for coal for any of the 12 pits or any of the pits that are not on the list but which communities feel will soon be the subject of the retrenchment approach of British Coal.
Will there be a secure future for Ellington? Will that future rest in the aluminium industry, which already has many problems? That cannot be a safe future for Ellington. We want the Alcan contract to remain at Ellington. It is an extremely efficient method of operation —the delivery of coal direct from one plant to another. In the aluminium industry, coal must compete with hydro-electric power and the arrival of aluminium from eastern Europe, where no genuine costing has taken place. The dumping of aluminium has resulted from the disruption of the situation in eastern Europe.
The market of electricity generation must be maintained if Ellington is to have a genuine future. Alongside the future of Ellington, we have a massive expansion of opencast. The impact of that on the subsidy element is not entirely clear. I have always taken the view that we must maintain enough opencast sites in our area, especially in Northumberland, to give some future to an industry that provides many jobs. However, that should not be done at the expense of massive despoliation of the environment in Northumberland or huge expansion of the areas involved. We are at that point now.
British Coal is arguing that it must have an opencast site outside the village of Ellington in which to put the waste from Ellington colliery, which it currently puts into the sea. That is a fairly unconvincing bargain to offer a community whose pit does not have a guaranteed or secure future. Indeed, there are considerable doubts in the area about whether the pit will last long enough for the restrictions on the dumping of coal in the sea ever to necessitate putting the coal in an opencast site for which permission is granted on those grounds. Therefore, those grounds will not weigh heavily. I hope that they will not weigh with the Minister when he eventually considers the application.
The future of all the coal pits—not simply the 12 pits that sparked the row—depends on a market that is rigged against the coal industry and was so rigged by the Government. They cannot escape the blame for that. They cannot refer to market conditions as though those conditions were simply handed to them. There are genuine market forces at work. However, the way in which those forces operate is predetermined to a significant extent by the decisions made by the Government when they privatised the electricity industry—the way in which they structured the regional electricity companies and protected nuclear power, and look like continuing to do so.
Nothing that the Government have said, and they have said so little, has carried the debate forward. I am extremely worried about the future of the coal industry in my constituency. I share the concern of Opposition Members who have already expressed their anger about what has happened to the pits in their constituencies.
I should mention the Minister's earlier touching reference to my party's election manifesto. He referred to

one of our apparent aspirations to generate 45 per cent. of electricity from wind power. We had no such aspiration. I have looked up the text of that manifesto and we are guilty, I admit to it, of giving excessive credence to Government figures. The relevant passage notes:
Government estimates show that up to 45 per cent. of electricity demand could be met from wind power.
I do not believe that we should ever place such confidence in Government figures and the Minister will note that we went to argue that such a target could not be met.

Mr. Simon Burns: Why put it in the manifesto then?

Mr. Beith: We noted that we might produce 20 per cent. of our energy from all the renewable sources, including wind and wave power. [Laughter.] The Minister and his colleagues seem to think that that is funny, but they must consider problems such as emission targets, pollution and resource depletion and make some genuine attempt to address them.

Mr. Martin O'Neill: I have a copy of "The Times Guide to the House of Commons April 1992", which contains a copy of the Liberal manifesto. Its section on energy does not bear much relation to what the right hon. Gentleman quoted; it is ambiguous, confusing and very Liberal in its approach. Under the heading, "The environmental balance sheet" and the sub-heading, "Renewable energy generation", it states:
45 per cent. of electricity demand could be met from wind power.
Under the subsequent heading of "Positives"—whatever they are—it notes:
Britain has a massive advantage in natural resources that give it the potential to be at the forefront of renewable energy generation. Government estimates show that up to 45 per cent. of electricity demand could be met from wind power.
That potential is referred to twice on page 345 of that guide. The right hon. Gentleman should have checked it. Admittedly, the Liberals' policies are invariably confused, but, in this case, they are not only confused but confusing to the people who read that manifesto.

Mr. Beith: That possibility may have been referred to twice in that guide, but it appeared just once in the original manifesto. It is recorded as a quotation from the Government. To place undue credence on any Government figures is never a terribly good idea and that is why we argued for no more than a 20 per cent. contribution to energy supplies from all renewables.
The Government are prepared to bolster artificially the position of nuclear power and I cannot understand how they can so readily dismiss the aspiration to increase the proportion of our energy supplies derived from renewables. If they and the Labour party think that that option is funny and the wrong way to go, they have a lot to learn about the desired energy policy.
We are discussing whether the subsidy will ensure that coal has a better and fairer opportunity to win markets in the next few years. I do not believe that the subsidy will achieve that aim.

Mr. Mark Fisher: It is interesting that the Minister made little attempt to claim very much for the motion, but perhaps that is scarcely surprising since the Government are throwing away billions of pounds worth of assets in coal reserves. The


money on offer is very small in comparison to them and in relation to the £1·3 billion a year that is given in subsidy to the nuclear industry.
The subsidy on offer is largely illusory, since the Minister knows that, given the present structure of the energy market, the chances of that subsidy being called upon is also non-existent. The idea is also illusory, because we have learnt from what the Minister has already said in answer to interventions that the mechanisms of the subsidy are largely illusory. Although the Minister described those mechanisms, he admitted that the one time that British Coal has attempted to negotiate with National Power, the subsidy and the mechanisms were not in operation. The Minister is offering British Coal a subsidy, but it will not know in advance what it will be worth. It will therefore be unable to offer anything of value to the person with whom it is negotiating.
The Minister probably knows that practical jokers, or confidence tricksters, perform a trick involving a pound note on a piece of elastic or string. The pound note is put in one's hand, but as one's hand closes, it is whipped away. I suspect that this subsidy is based on very much the same principle. The appearance is of a sum of money being provided, but it is very well attached to a piece of elastic, the other end of which is being held by the Minister. I doubt whether any of the money will ever be called down.
The Minister has said how small the market is and has told us that it will be impossible for British Coal to create new markets. He knows very well that if new markets are not created, this assistance will not be called upon. When the illusion—I will not call it a confidence trick—is understood by the British people, who were outraged last October by the Government's action, there will be equal anger. The Government ought to behave better towards the coal industry. The reason for people's concern last October was their recognition of the debt that the country owes to the industry. This is a strange way to repay that debt.
If the Minister had any sense of history, he would realise that the only reason for our being a manufacturing nation, the only reason for our having been a great industrial, economic and political power for the past 200 years, is that there was an industrial revolution based on coal. My city, Stoke-on-Trent, owes its very existence to the coal seam on which it is based. The Government owe the industry better treatment. In their outrage last October, the British people, even if they did not understand the full complexities of the energy market, sensed that something was wrong. Nothing in the provision with which we are dealing tonight will suggest to them that the situation is being put right. This subsidy will change nothing.
It is clear that the Government are in a very curious and confused position. During today's debate on the closure of mines, the Secretary of State and the Minister for Energy repeatedly claimed that they could not interfere with the energy market, that pure market forces would determine everything. Despite that, the Minister is offering a subsidy. He is intervening, albeit in a thoroughly small and inadequate way, by providing a sweetener for any sales that British Coal may be able to secure. This demonstrates that the Government are able to intervene in the market; indeed, it is necessary that they do so. Thus, their earlier argument—that it is impossible to intervene in the energy market, as it is a pure market—is torpedoed.
This minimal assistance for the industry does not accord with the professed concern of the Secretary of State for Employment for the coal industry and all those working in it. It may be claimed that that concern is reflected to some extent in this very small subsidy. It is certainly not reflected in the way in which British Coal is treating miners who are made redundant. The Minister will know that workers in the coal industry can qualify at the age of 55 for early retirement.
Trentham, which is in my constituency, closed on 4 June. Miners who reached early retirement age two or three weeks later have been denied early retirement procedures. That is in marked contrast to the way in which British Steel operated when it closed Shelton Bar and other works 10 years ago. However harsh the conditions of those closures were, British Steel was at least sympathetic towards people who had spent their entire working lives in the industry and were on the brink of achieving early retirement.
The Minister is raising his eyebrows in apparent surprise. Let him ask Mr. Neil Clarke about the procedures for miners who are within days or weeks of achieving early retirement. Those in my constituency are told that they will have to wait a further seven years. For the past few years, miners have based their early retirement on retiring at the age of 55. In one case, a person was denied early retirement because of a matter of only two weeks. That is a disgraceful way to treat people who have given their whole lives to the industry. If the Minister wants his view that he cares about those who work in the industry to be credible, I hope that he will take that up with Mr. Neil Clarke and see what can be done.
Similarly, I hope that the Minister will take up the question of the effect of so-called "voluntary redundancy" on miners' home security. I hope that he now understands that, because of his Department's requirement, British Coal has forced those redundancies through as voluntary redundancies, when he and the rest of the world know perfectly well that they are compulsory. Because they are nominated as voluntary redundancies, the insurance clauses in miners' mortgage agreements will not operate. All insurance clauses on mortgage policies are made null and void if somebody volunteers for redundancy.
So miners have not only lost their jobs; if they fall behind with their mortgage payments, they have no insurance protection and stand to lose their homes as well within a few weeks or months. Is that what the Minister wants for people who have given their whole lives to the industry? He could do something about the behaviour of British Coal towards early retirement and pensions, and miners' home security. I urge him to do both.
Will the Minister talk to the Department of Social Security and ensure that the Government make a ruling on how regulation 51(7) of the Income Support (General) Regulations 1987 operates? I hope that he understands that, under those regulations, if the Benefits Agency believes that somebody receiving a lump sum has deliberately reduced that lump sum with intent to claim benefit, it is entitled not to pay income support.
On being made redundant from Trentham, a single parent constituent of mine spent his redundancy money on reducing his large mortgage because the job that he managed to find was low-paid. As a responsible parent, he knew that he could not sustain the mortgage that he had undertaken when he was a miner, so he used his redundancy payment to pay off the mortgage. When he


was made redundant a second time a few weeks later, the Benefits Agency refused to pay him income support on the basis that he had disposed of his capital. He had used his redundancy payment responsibly and found another job, as the Government wanted him to do, but when he was made redundant again it was implied that he had tried to con the system and therefore would not be allowed income support. That cannot be how those regulations are intended to be applied. In that instance, the case was overturned on appeal and the man found that he was entitled to income support.
Nevertheless, if the Minister wants to act constructively he should look at the matter and, together with the Department of Social Security, issue guidelines so that miners in such a position are not denied income support when they have acted perfectly honourably. He could and should look at those important points, as those measures would take some of the pain and anxiety away from our constituents, whom the Government have thrown into that appalling position.
The Minister has not made many claims for the subsidy, which is at least something. He should, however, look at those other points, because how the Government treat the men who have worked all their lives in that industry and the resources which they make available to them are every bit as important as subsidies to the price of coal. I hope that he will bear that in mind.

Mr. Peter Hardy: In his wind-up speech in the earlier debate, the Minister accused the Labour party of being the captive of history. I am not sure whether the word "captive" is correct, but we are entirely justified in paying careful attention to history. Those of us who represent mining districts have a considerable and relevant history to study.
Reference has been made to the links between some constituencies and the mining industry. The link is as deep in my constituency as in most others. Pits were closed in the 18th century and in the 19th century. Between 1814 and 1939, we lost four pits, we lost one in the early 1970s, one in the late 1970s and four in the 1980s.
At no time in the past when a colliery closed—be it long ago or more recently—has it been against such a grim, severe and declining economic background as that of Britain today. It is time that the Government understood that the fundamental cause of Britain's economic weakness is the balance of payments deficit, which is enormous and is likely to grow considerably as a result of the present decisions being made about the coal industry.
I realise that many of my hon. Friends regard the subsidy as little better than a myth, but I am more suspicious than many of my hon. Friends. I see the subsidy as part of a three-pronged approach to privatisation. It was interesting that, at one point in his speech, the Minister appeared to suggest—I hope that I am not misinterpreting his view—that, at some time, the Government could return for a little more. That suggestion aggravated my suspicions about a three-pronged approach.
We have watched the Government privatise the energy resources of Britain, and arrange various sweetners to assist in that privatisation. We have seen unnecessary

increases in the price of electricity. The Government were careless about the bad effect of those increases on heavy energy users in industry. The prices were increased in advance of privatisation to make it more attractive.

Mr. Eggar: indicated dissent.

Mr. Hardy: It is no good the Minister for Energy shaking his head, as the record is clear—the electricity price rose enormously and excessively before privatisation so that the sales could proceed, and the same happened with gas. The Government did not merely sell it for less than it was worth: they sold it against a background of excessive profits—and they could not care less about the effect on manufacturing industry or the poorer domestic consumer.
I am suspicious. The Minister now has the capacity to dangle sweeteners, if they are needed, to assist the Government's friends. They are not our friends—the Conservative party, not the Labour party, will receive the little donations in gratitude.

Mr. Kevin Hughes: Some of them are not so little.

Mr. Hardy: My hon. Friend is right. I do not think that the Conservative party will receive the same sums for the purchase of a pit as it does from overseas residents seeking to encourage the Government to maintain tax breaks. The subsidy provision exists to encourage privatisation.
The second prong of the Government's approach to privatisation involves pension prospects. The Government do not seem to understand that pensions are part of a worker's reward. I do not know how anyone can find the moral justification to grab workers' earnings in the form of pension funds. I think that the Government may find themselves in deep water over that issue.
The third prong, to which the Minister referred in passing, concerns me deeply. On 29 March I intervened in a speech of the Secretary of State and was pleased with his answer, because it was unequivocal. He said that nothing would be done
to prejudice safety standards in the mines."—[Official Report, 29 March 1993; Vol. 222, c. 31]
Since that debate in March, which does not seem long ago, British Coal can claim that productivity has increased by 22 per cent. If that astonishing improvement, which has not been matched in any other industry at any time since the second world war, can be achieved in the coal industry, why do the Government wish to make the dramatic changes in safety regulation?
Again, I am suspicious. The Secretary of State gave the House an unequivocal assurance, as he described it—but shortly afterwards, the Health and Safety Executive took to the Department of Employment its proposals for dramatic changes in the mining industry's safety regime. I can think of no other reason for that, other than for it to join the subsidy and the attraction to the pension funds of the greedy eyes of those the Government would like to see own the coal industry rather than the community.
I said that the subsidy was a myth. I am extremely sensitive to electricity prices. We have in my constituency perhaps the finest engineering steel industry in Europe, and certainly in Britain. My hon. Friends who represent the Rotherham area are well aware of its enormous achievements and of the records that it holds and repeatedly breaks. They know also of the problems that


confront that industry because electricity prices are far higher than they need be—and would be, were coal to account for a larger share of the generation market.
If there are to be any subsidies, they should subsidise the privatisation of the coal industry but the maintenance of adequate levels of industrial activity in this country.
I do believe that this is not a myth, but something more perverted—part of a three-pronged preparation for privatisation. It is part of the record and prospectus of a Government who have created the decline in our recovery that made our nation plunge down into the poverty league, so that, before long, Spain, Portugal and Greece will pass us in the EC's economic league, in the same way that Belgium, Italy, the Netherlands and Luxembourg have done in the last 10 years. For as long as such policies are pursued, that decline will be unavoidable.
That decline is due to the short-sighted calculations of a Government who do not seem interested in the welfare of the economy—and because of that, I do not believe that the Government are sufficiently interested either in the safety of people who work below ground.
If the Minister has time to reply, I hope that he will tell the House where we stand in relation to pit safety. Is safety to be no greater a reality than the subsidy? May we expect that the promise given to the House by the Secretary of State—who, unfortunately, cannot be with us today—on 29 March will be kept? Are we to see the disappearance of the role of the colliery deputy, who will no longer have a statutory power to secure safety in the mine? Will we once again see the Government sacrificing the interests of the nation and of the individual to the rather sordid sort of people with whom the Government seemed to have been concerned over the past 10 years?

Mr. Dennis Skinner: My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) referred to redundancy payments made to miners and to others that ran foul of social security laws in respect of mortgage repayments, and so on. I hope that the Minister will pass on that information. The Department in question ought to make a statement, to ensure that people do not have to appeal because of variations throughout the country.
Some local Department of Social Security offices are saying one thing, and some are saying another. A fortnight ago, I obtained about £1,200 in back money for one of my constituents—a miner who was made redundant. If that is happening on a wide and varied scale throughout the country, it is time that the regulations were made firm, to end the situation whereby people in certain parts of Derbyshire will be paid, whereas people in certain parts of Staffordshire and Yorkshire will not. I hope that that will be dealt with.
The debate is about the subsidy and about the Government buying time after their announcement to save 12 pits. We knew that that was a confidence trick and, as many of us also knew at the time, the subsidy would not add up to a row of beans. It was a Portillo subsidy, and the Chief Secretary to the Treasury was quite happy about it. When it was discussed with the Secretary of State, it was probably said, "Look here, we will tell the House in this great White Paper debate that there will be a subsidy, but don't bother about it a great deal. You will be quite happy with it, Mr. Portillo, because at the end of the day not a great deal of money will be spent, if any at all."
We thought that that would happen. The Tories were bought off, but more importantly, the people outside were disgusted at this confidence trick carried through by the Government. This short debate about the subsidy will put on record over and over again that we do not expect a great deal to be paid. It is a pity that the Minister did not quite finish what he was telling me about how the mechanism would work. I was becoming intrigued, but then he recovered himself and said something about it being a commercial matter between British Coal and somebody else. For a time, I thought that he would reveal a little more.
I would like a subsidy for mining similar to the set-aside scheme for farmers. Coal is a great national asset. It would be sensible to say that, as great tracts of land are set aside at £100 an acre—I think that the royal family made about £250,000 out of the scheme—such a scheme should operate for mining. It is said that farming is beset by the problems and elements of mother nature and cannot compete in the same way as someone working in a factory or a shed. Therefore, the argument goes, a subsidy must be paid because bad weather could result in crops not growing.
Does not the same argument apply to the pits? Miners have to deal with mother nature underground, so there should be a set-aside subsidy for mining. That would mean that, when a colliery struck a bad seam, the miners could be told, "Set it aside. We will set aside money so that the pit can ignore the bad seam." The Minister spoke about some of the 12 pits and said that they are not making money. No pit in Britain makes money in the first half of the financial year, because that is when nearly all the holidays are taken. But the second half of the financial year, when there is only one holiday, Christmas, often makes up for the massive loss in the first six months.

Mr. William Cash: The hon. Gentleman makes a great deal of the comparison between pits and agriculture. We are being ripped off by the European Community because the Germans are being allowed to set aside 19 per cent. of their land, whereas we are allowed to set aside only 12 per cent. In 1991, the Germans paid £9 billion to their miners but, according to the Minister, we paid only £180 million. I accept that there is a nuclear levy, but irrespective of that, our mining industry is being ripped off.
I hope that the hon. Gentleman accepts that we are being ripped off right across the system, because Britain is being sold down the line in respect of agriculture, the single market and the coal industry. I want the European Community to work, but not on the terms being described at the moment.

Mr. Skinner: For a short period, I thought that the hon. Member for Stafford (Mr. Cash) and I were on the same playing field. However, he then said that he wanted the European Community to work. I do not. I think that it has been an unmitigated disaster, and I want it to fail. However, I have always accepted that it is not as easy to grow food in a country such as Britain as it is to grow food in the Mediterranean countries and in California. Therefore, I have always accepted the idea of having subsidies or, better still, deficiency payments, so that we do not have to import too much food.
My worry is that the money has gone into the wrong pockets. I would sooner see the money in the farmworkers' pockets than in the pockets of the rich business farmers. I


accept the point made by the hon. Member for Stafford about £20 for every family going into the common agricultural policy. I have no doubt that thousands of miners are saying, "If there can be that kind of subsidy for the CAP, we should have some sort of subsidy for the coal industry, because it also has to battle against the elements."
Let us not kid ourselves. "Subsidy" is not a dirty word. We have to have subsidies to run a highly technological society. One cannot run a school without subsidies, although I know that the Government are trying. However, subsidies are paid even to opted-out schools, so that they have more money than schools that are still under local education authorities. That is true of almost all aspects of our lives. There could not be a royal family without subsidy. I am in favour of the demise of the royal family, but I understand how they manage to live in the lap of luxury.
We are always hearing about Nissan coming to Britain. Of course Nissan came to Britain. The Government said, "Here is £300 million to come to build a factory in Sunderland." They said to Toyota, "You can have a bit more if you come to Derby." Every local authority in the area said, "We will give you some more advantages as well." That is a subsidy. There are subsidies for most things in life.
We have always argued that there is a way in which to deal with the coal industry. It should not be dealt with on the basis of a phoney subsidy to buy time to con the British people. The subsidy should be based on a pit's work from year to year or over a five-year period. The period must be five years to deal with cycles within a pit, as it goes through bad work and good work. Proper payments are needed. We have always argued that we need a big coal industry, so that the strong can help the weak and vice versa, in good times and bad.
The only thing that made me smile was the French interconnector subsidy. That subsidy goes from the Government, through the nuclear levy, and we then pay the French to send us electricity that competes with our electricity. The French get a big sum out of us. It is a joke that the French are able to send us electricity for which we have paid a massive price in the process.
I am still trying to find out whether there is anything in the following idea. As the Government work on the principle that they help people who help the Tory party with donations, especially foreigners, I wonder whether any of the French subsidy money has an Asil Nadir lurking among it. That has not been discovered yet. I just throw the idea in. Is there somebody who has sent the Government some money?
The French people say, "We have a really good score going here with the British Government. They are a bit thick and they are run by a wimp, but we are actually selling them electricity and they are paying us to send it." There is bound to be a hidden agenda, with somebody saying, "We must slip them a few quid," or, to use the parlance of Terry Venables, "bung them a bit." It is odd that we are getting electricity while the French are laughing.
I suggest to the hon. Member for Stafford, who follows these matters very carefully, "Check that out." He is a man for detail on French subsidies. It is just possible that he might discover something much more serious.
I have seen figures of £1·2 billion and £1·3 billion for the subsidy to the nuclear power industry. That subsidy enables it to capture 22 or 23 per cent. of the market. It is a subsidy. The Government can argue that the money is to do with decommissioning, but anyone who knows anything about the industry knows that it is a subsidy. The only difference between the subsidies to which I have just referred and the one that we are discussing tonight is that the one that we are discussing tonight is a fairy-tale subsidy—it is about fantasy land—whereas the others are real.

Mr. Beith: Cash in hand.

Mr. Skinner: Cash in hand, as the right hon. Gentleman says.
The sad thing is that a great national asset is going down the pan. We are not talking about rebuilding a factory, which can be done in a short space of time. As you, Mr. Deputy Speaker, will know, having been born and bred in a mining community—like many hon. Members present tonight—when pits have gone, they have gone. Once the ground is made unstable by opencasting, there is nothing that can be done.
Suppose that, in 25 years' time, an enlightened Government come along and say, "All the gas has gone and all the oil has gone. We ought to get back to coal, because we don't have enough windmills." Suppose that they have made an effort but there are still not enough —that they have not got up to 5 per cent., never mind 45 per cent., even though the commitment has appeared in 15 manifestos. They will have to turn back to coal. The trouble is that, once opencasting has taken place, they will not be able to do that.
My guess is that that is part of the conspiracy referred to earlier in the debate. British Coal has got off pretty lightly in this argument. I am not averse to attacking the Government every day of the week—

Mrs. Alice Mahon: You do.

Mr. Skinner: And I do. But British Coal is part of the conspiracy. It wants a small privatised industry; make no mistake about it. It is in this business; it wants pits such as that referred to by the hon. Member for Stafford—and all the others to which my hon. Friends, referred—shut. It wants a tiny little group of pits so that it can get the 30 million tonnes at the power stations next year. It does not want much else and, what is more, it does not want any competition.
The best way of achieving that end is to ensure that, before the year is out, the pits are closed. British Coal will then have a dozen or 15—the figure could even be as high as 20, although it will probably diminish if the Government stay in power much longer—of the best pits left. It will have a captive market, just like the gas market.
It will make a bomb and Neil Clarke will he running it. That is why I challenged him in July 1992 when I went to Hobart house with my hon. Friends from the mining group. I asked every member of the board, "Will you have anything to do with privatisation?" Ken Moses jumped up and said, "Don't try and talk to me, Skinner. I won't touch it with a bargepole." Neil Clarke said, "Don't anyone else


answer that question," and took his members—the board —out of the room. He did not want to let the cat out of the bag.
British Coal wants that small industry so that it can make profits—

Mr. Cash: Does the hon. gentleman accept that rumours are circulating round the coal industry at the moment to the effect that, in respect of the prospectus—bearing in mind that the applications for licences have to be submitted by 16 July—there are two sets of figures? The amount of money that is expected to be forthcoming for the top end—for management—is one figure, but there is also a real figure at the bottom line, which they will accept.
In other words, there is a serious question mark over the figures. The Minister has an obligation to tell us whether there are two sets of figures for those who want to acquire those mines. If the mines are to be privatised, some people could get in on the inside track, and it could be the management of the coal industry.

Mr. Skinner: That is another question that the Minister must answer. I hope that the Minister has heard quite clearly that there is a Cash rumour going round that there are two sets of figures. Let me buy that theory for a moment or two, and ask the Minister to reply.
The other sad thing is that we are talking about men's and women's lives. We are talking about communities that have been smashed asunder. There have been closures throughout my time as a Member of Parliament, and there were closures while I worked in the pits. I saw the pit close in which my father worked and in which I worked. I saw all that, so I do not want to hear, "You closed more than we did." In my view, hardly any of the pits should have closed anyway. Parkhouse colliery, where I worked, was shut and there was a lot of coal left. It was opencasted later, which proved the point.
We are talking about miners who will not get arty jobs —no voluntary redundancy. Everybody in Lancashire has been told that there are three jobs at Point of Ayr. Everyone in Yorkshire and in the constituency of the hon. Member for Stafford (Mr. Cash) who says, "I do not want to leave the industry," is told that there are three jobs at Point of Ayr. It is like the subsidy—a confidence trick from beginning to end, because not everybody can take those three jobs at Point of Ayr in the north Wales coalfield.
There will be a lot more casualties. The Government might be able to whisk them away on some other scheme, so that they do not show up as unemployed. They will use all the techniques of statistics to say they have not been added to the dole queue, but each hon. Member who represents a mining area knows that we can count them, because we know almost everybody who lives on every street.
The sad thing is that, if we think about it, we come back to another subsidy, because, if 100,000 people lose their jobs in Britain today, it costs £900 million per annum. We are talking about a public sector borrowing requirement of £50 billion. At end end of the day, it is not about us, but about people out there in the communities; that is why the Minister has an obligation to answer all the questions and to tell us precisely how the subsidy will be paid.
He was on the track once: he was going to tell us. My guess is that, by the end of the financial year, hardly any,

if any, of it will be paid. I know that one thing is certain: any more of this and a lot more people will be on the dole queue.

Mr. Kevin Hughes: The Minister mentioned the subsidies. As other hon. Members have said, the subsidies are bogus; they are not going to happen. Who has had any money? How many extra bags of coal have the Government lifted a finger to try to sell? Not one. Who will qualify for any of the subsidy? My view is that nobody will qualify because they were never intended to qualify for it.
Let me put my cards on the table. I was born and bred in a mining community and I still live in the heart of a mining community. Only the other week, the Minister and I had a debate on the Adjournment about the closure of Thorpe Marsh power station. He knows only too well my concern for the two pits in my constituency that will be affected. I should like to see some subsidy going to those two pits because they have lost a third of their market due to the closure of Thorpe Marsh power station and they are both under market testing. I should like to know, and I have never had a proper answer yet, where on earth those two collieries are to get a third of the market and stay in operation under this so-called market testing?
We are debating a very serious issue. Unfortunately, some Conservative Members seem to think that it is funny and that it is an opportunity to score cheap party political points. It is not. It is a very serious issue. This afternoon, in my opinion, which I know is shared by some Labour Members, the Secretary of State for Employment, who led for the Government, made a disgraceful speech.

Mr. Burns: Rubbish.

Mr. Hughes: It is not rubbish. The Secretary of State spoke rubbish for almost an hour. He tried to make cheap political points for television sound bites. I tell the hon. Member for Chelmsford (Mr. Burns) that this is a very serious issue. Hundreds of thousands of people will lose their jobs because of his Government's lack of an energy policy. Pits will be closed, power stations are now closing, railway jobs, engineering jobs and steel workers' jobs will be lost. There is no end to the knock-on effect of closing a pit.
My constituency has an unemployment rate of 14 per cent., which is not funny. Two more pits are likely to close; Thorpe Marsh power station will close. Some Conservative Member should tell those people in Doncaster where they are to find jobs. There simply are not any around, and communities are being torn apart.
I have watched the hon. Member for Chelmsford all day. He has sat there smirking and pulling stupid faces. He should be out of a job, trying to live on the current rate of unemployment benefit: that would wipe the stupid smirk off his face.
Doncaster has been promised development area status and an enterprise zone. The Minister and I have discussed the matter on many occasions; as he knows, I would like him to tell the people of Doncaster what their position is likely to be—and, more important, when the Government will put some money back into the community that they have systematically raped since 1979.
I have been passed a note asking me to end my speech, so I will end it shortly. As the Minister knows, Doncaster


borough council has worked very well with local industry in trying to regenerate Doncaster; it has worked closely with the people there. It is doing all that it can to regenerate Doncaster and put some new jobs into it, but it cannot do that alone. It needs the subsidies, it needs the enterprise zone and it needs development area status.

Mr. Cash: On a point of order, Mr. Deputy Speaker. At least three Opposition Members have spoken. I voted against the Government on this issue twice—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Opposition Members have spoken because I have called them; most had been sitting in the Chamber all day. With great respect, the hon. Member for Stafford (Mr. Cash) arrived late for the debate, and his interventions have been too long.

Mr. Martin O'Neill: In his introduction—if it can be called an introduction—the Minister made it clear that, following a recommendation from the Select Committee on 26 January and a White Paper on 25 March, the Government are still no nearer determining what they mean by "subsidies". They can give us no clear indication of the amount involved; it could be anything between £10 million and £120 million. The Minister could come back and ask for more if necessary. Some hon. Members have said that it will not be necessary, because there will be no market; I am not so pessimistic, which is partly why I do not wish to oppose the motion.
I think that British Coal will eventually want to take advantage of the position, and that there will be sales later in the year. I do not think that the sales will be significant, or that they will keep many people in employment; but I think that there will be some sales, and I hope that the subsidy will be there to be taken advantage of.
Our present difficulty is that we have a British Coal management led by one of the most supine chief executives most of us have ever encountered. He does not seem interested in driving any of his senior management to look for new markets; the organisation has never had to sell any of its output before, because there has been a guaranteed market for it. For a number of reasons, that market no longer remains in its previous form.
One of the tragedies of the Clarke regime in British Coal is that the chairman has not been capable of devising a strategy to enable the organisation to seek new markets and develop products that those new markets could require, either here or elsewhere on the continent. I have sympathy with the suggestion that the regime is not interested in expanding the market because it envisages a Rothschild-type model which will be in the order of 12 to 14 collieries, capable of being privatised in a neat little package. We shall just have to wait and see; I am not sure whether it will happen but, like other hon. Members, I suspect that it will.
It is clear that the Government will have to do a great deal more homework in the next two or three weeks if they are to be able to tell us the sums that will be made available and the nature of the subsidy. They have had the statistics for some considerable time. Information given to the Select Committee by the National Union of Mineworkers could act as an outline, and information about the price

per gigajoule of colliery output would be a starting point. The calorific content of the coal is another variable, but such matters are not great mysteries. The statistics are available to British Coal, and the energy section of the Department of Trade and Industry should have them.
I suspect that one of the major problems is that the dilatory, indifferent, dithering approach which has characterised the regime at the DTI in the 14 months since the general election, still prevails in the important sphere of the Government's so-called energy strategy. After all these months, the Government are still not able to tell us what the sum should be—how much there will be for each power station and what it should be across the board. Until they are able to tell us, we shall be entitled to take the view that the subidy is a mirage. Until we have specific figures, we shall unfortunately have to accept the motion on the nod. If we did not, we should be frightened that the subsidy would be needed in the summer and the House would not be sitting to sanction it.

Mr. Eggar: With the leave of the House, may I point out gently to Labour Members that in the previous debate we heard various accusations about the market being rigged against coal. The gist of their comments today has been, "We want a subsidy, we want it big and we want it clear." There seems to be a slight inconsistency—I put it no stronger than that—in those two positions. I set out the procedures in response to a written question from my hon. Friend the Member for Waveney (Mr. Porter) on 16 June, and hon. Members will no doubt benefit from reading it.
In the time available, I shall try to pick up some of the issues that have been raised. The hon. Member for Hemsworth (Mr. Enright) mentioned specifically Grimethorpe and Houghton Main. I have taken careful note of what he said and, as a number of the issues involve British Coal, I shall ensure that British Coal also studies his remarks. I noted his comments about RECHAR. Of course, more than £200 million extra is going to the coalfields as a result of the decision in October, and we need to consider carefully how the hon. Gentleman's council and local community can access some of the funds.

Mr. Cash: Will my hon. Friend the Minister give way?

Mr. Eggar: I shall deal with my hon. Friend in a moment. I hope that he will forgive me for not giving way, but I am under a considerable time restraint.
The right hon. Member for Berwick-upon-Tweed (Mr. Beith) advocated renewables; in fact, he did not advocate them but tried to explain why the Liberal manifesto contained a reference to windmills—he had not meant it but it was intended only for those windmill nuts who happened to read it. It is unfortunate that my hon. Friend the Member for Calder Valley (Sir D. Thompson) is not here, because he described windmills as great lavatory brushes in the sky and he would no doubt have had something to say about Liberal party policy. There is also an inconsistency in the right hon. Gentleman's remarks because he is against subsidies for the nuclear industry but in favour of large subsidies for the renewables industry.
The hon. Members for Stoke-on-Trent, Central (Mr. Fisher) and for Bolsover (Mr. Skinner) made some specific points, and I undertake to ensure that my colleagues in the Department of Social Security examine them. For a moment there was an interplay between my hon. Friend


the Member for Stafford (Mr. Cash) and the hon. Member for Bolsover. Images crossed my mind of the hon. Member for Bolsover as a Minister, accompanied by his private secretary, my hon. Friend the Member for Stafford, whose love of detail the hon. Gentleman recognises. I am not sure whether my hon. Friend the Member for Stafford would go along with the hon. Member for Bolsover. I have an interesting letter from the hon. Member for Bolsover. It is written on behalf—

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER proceeded forthwith to put the Question, pursuant to Standing Order No. 14 ( Exempted business).

Question agreed to.

Resolved,
That this I-louse authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, sums exceeding £10 million in total but not exceeding £120 million in total to support sales of coal produced from underground mines in the United Kingdom.

Orders of the Day — Coal Industry (Restructuring Grants)

The Minister for Energy (Mr. Tim Eggar): I beg to move,
That the draft Coal Industry (Restructuring Grants) Order 1993, which was laid before this House on 24th June, be approved.
The order has two purposes. First, it specifies the types of restructuring expenditure for which grant may be paid in the present financial year. These include costs of redundancy and early retirement, transfer allowances and retraining. They also include costs incurred by British Coal Enterprise Ltd., the subsidiary of British Coal which promotes new job opportunities in areas affected by pit closures. Secondly, the order sets at 90 per cent., as last year, the maximum percentage of restructuring costs which can be met by grant in the current financial year.
Restructuring grant has proved to be an essential part of the Government's assistance to British Coal. The grant helps the industry to adapt to changing circumstances. The payments support generous redundancy terms for miners and staff losing jobs as a result of closures and efficiency improvements. They have also helped British Coal Enterprise Ltd. to create nearly 90,000 job opportunities and resettle and retrain some 32,000 people since 1984.
I commend the order to the House.

12 midnight

Mr. William Cash: The Minister sought in his previous speech to make light of the fact that there are those who are profoundly concerned about the way in which this matter has been handled since last October. He made some trite and rather irrelevant comments about whether I might or might not be the Parliamentary Private Secretary to the hon. Member for Bolsover (Mr. Skinner).
If the Minister really wants to be the butt end of the coal industry, he should make irrelevant remarks of that kind. They were trivial, pathetic and irrelevant. The Minister should understand the extent to which people in the coal industry and in my constituency are deeply concerned about what is happening.
I hope that the Minister will take this on board because his trivial and pathetic comments do not merit the kind of absurd—

Mr. Alan Duncan: —language that my hon. Friend is using.

Mr. Cash: I am glad that the hon. Member for Rutland and Melton (Mr. Duncan) butts in to say that that is irrelevant. We have a serious problem in relation to the extent and range of problems facing the coal industry.
We have a massive problem in terms of Government public expenditure. My right hon. Friend the Chief Secretary to the Treasury recognises that. I am not sure whether the Minister for Energy, or whatever he is called at the moment, really understands the nature of the problem, given that we are offering minimal support to people in my constituency, in contrast to the cost to central Government of £85 million in the first year of the closure of the Trentham pit and prospectively the closure of the Silverdale pit. That is offset by the Government's minimal response to the amount of money that those pits require to remain open.
I recall very well the Minister's response at a private meeting that we had last October, when he was incapable of answering the questions that we put to him, and the extremely insipid response that we have had since—[Interruption.] The Minister's Parliamentary Private Secretary, the hon. Member for Chelmsford (Mr. Burns), has used language that must be completely and utterly out of order in the House.
The coal industry faces a serious problem and that has been completely overlooked in the response of the Minister and the Secretary of State today. We are facing a critical problem in relation to the energy policy of this country. [Interruption.] I am not interested in the rather trivial comments made by a Parliamentary Private Secretary, the hon. Member for Chelmsford, in this context. The reality is that we are faced with a serious problem in respect of the communities in the coalfields. They are people who have worked hard in those pits over a long period. We are offering them a minimal response against the background of the Coal Board itself offering them redundancy payments under duress. We are offering them a minimal response when there is no justification either for the closure of the Trentham pit or for the prospective closure of the Silverdale pit.
I am very interested that the Minister should think that this matter is so funny, judging by the expression on his face. I cannot understand why we are so pathetic in our response to the arguments that have been put forward not by the Opposition but by reference to our own principles. Why is it that we do not give people access to the core contract? Why is it that we perpetuate a monopoly in the United Kingdom in respect of domestic coal policy?
Why is it that, in respect of European Community interstate trade, we are prepared to allow the Germans to get £9 billion of subsidy for their coal industry when we are given, even excluding the nuclear subsidy, a mere £180 million, bearing in mind the effect that that has on our coal industry and the people who work in it, not to mention the knock-on effect? I am glad that we are giving some money, but my concern is simply that we are giving a minimal amount; we are not enabling those people to get off the ground again following the closure of the pits.
Those of us who believe in Conservative policies are anti-monopoly, and we want a level playing field in the European Community. We do not want our coal miners to suffer and our pits to be closed down when the Trentham pit has 300 million tonnes of British coal. Will the Minister explain why we are closing down those pits and the Silverdale pit, if that is what will happen, when we have hundreds of years' worth of assets in hand? Why is that happening?
I am interested that the hon. Member for Rutland and Melton should be so concerned to support the Government on this issue, when he knows that there is a serious problem in his area as well as in mine. I am very much in favour of the Government's policy with regard to a fair and reasonable energy policy in the European Community. What I am concerned about is that we have rolled over—we have accepted that the pits are to close, when elsewhere, in Germany and in France, pits are kept open.
I see the Parliamentary Private Secretary shaking his head again. He knows perfectly well that that is going on. The statistics exist. There is no way of getting away from that.
I do not understand, and I should be grateful if the Minister would explain, why our pits are closing when there is a £9 billion subsidy paid and authorised by the European Commission to the German coal industry, so that our energy users are at a disadvantage compared with those elsewhere in the European Community. This is Conservative policy—this is Government policy—to make sure that we have a fair and level playing field in the European Community. Shutting our coal pits and ensuring that we do not have a reasonable opportunity to compete on a level playing field is a travesty of our policies. Will the Minister please reply to me tonight?

Mr. Eric Illsley: I want to speak about the redundancies that have taken place since October. I draw the attention of the Minister to the way in which workers at the collieries have been blackmailed into accepting redundancies, usually at short notice. It is not that they want to accept the specific amounts of money, but they have no option. They are faced with the loss of thousands of pounds and have no option but to accept the terms of the redundancies.
Since 1983, every redundancy scheme introduced by British Coal was time limited. As we approached the end of that time limit, British Coal threatened workers at collieries due to close with the loss of top-up payments or redundancy payments if they did not agree to the closure. There was always the promise of an extra premium payment.
A slightly different tactic has been used since October. Under the present scheme, British Coal offers all the workers at a specific colliery the same weekly wage on which their redundancy payment is based. In other words, all the workers are offered the same maximum £300, regardless of their weekly wage while they were working at the colliery. In that way, the redundancy payment is enhanced and is offered to the miners, who have no option but to accept it as the colliery has no future.
The men who worked at the collieries that have closed are frightened and concerned about their future employment. In October, the decision to close the 31 pits was followed by the White Paper. The pits that were supposedly given a reprieve have been closed. There is so much uncertainty about the collieries that will be left open by British Coal that miners do not have any view of their future employment.
There is no certainty about which collieries will remain open. We heard warnings tonight that we could be heading for the Rothschild report scenario, which means that only 14 collieries will be left open in a few years. Some 18 months ago, the British Association of Colliery Management forecast that the industry could be supported by only four collieries. That is a much worse scenario than the Rothschild report.
Many of the miners who have been placed on the scrap heap as a result of the redundancies in the coal industry are in their early 30s. We are not talking about men who have worked in the industry most of their lives and who are now approaching an age at which they can make good use of redundancy payments in early retirement—we are talking


about young men aged 30, 31 and 32. I met one recently who was only 26 years old. Those men now face a future of no further employment. Many of them will never work again, because the work is simply not there.
In my area, where the Grimethorpe and Houghton Main collieries have closed, the unemployment rate is 17 per cent. overall. There are certain wards with an unemployment rate of more than 20 per cent. and in some cases it is approaching 30 per cent. Male unemployment is especially bad. There are no job prospects in these areas. There is no prospect of quick inward investment to replace the jobs that are being lost, so we face all manner of problems in these areas as a result of the pit closures.
Earlier, the Minister talked about British Coal Enterprise. Part of the order deals with grants to that organisation. He also talked about 85,000 job opportunities. That is all they were—job opportunities. They were not real jobs. In no way has British Coal Enterprise provided 85,000 miners with jobs. Job opportunities and actual jobs are two different things. We have repeatedly asked British Coal Enterprise, the Government and British Coal to tell us how many jobs have been created by British Coal Enterprise. The figure has never been made available to us. All the comments about British Coal Enterprise are a load of rubbish. No jobs—or very few, if any—have been created.
When workshops were being closed, British Coal Enterprise paid the workers to form their own company. British Coal contracted out the work that they were doing as British Coal employees to a private company set up by the lads who accepted redundancy. That meant that employees at other British Coal workshops were competing with their former colleagues who had been encouraged to set up their own company and contract to British Coal. Obviously, because the contract was cheaper, since British Coal did not have to pay national insurance contributions and so on, the new company got all the work.
The redundancies that have been made at collieries in the past year have been compulsory. There was no voluntary element. Transfer to other collieries is no longer an option because the distance between them is too great. In any case, other collieries have no jobs to offer redundant miners. Those men are offered no choice, no transfer, no future, no alternative.
British Coal workshops have also been subject to closure, in particular Ashington and Shafton. The employees at the other workshops, Bestwoocl and Tursdale, are mainly members of the Union of Democratic Mineworkers and—surprise, surprise—they have been provided with work at the expense of the employees at the other workshops. The work force at those UDM workshops were recently cock-a-hoop about contracts that they were set to win through a company called Vista UDM. Some of the collieries in Nottinghamshire are to be turned into recycling plants and those workshops are to have the contracts for their refurbishment and maintenance. Again, that will be done at the expense of the other workshops at Shafton and Ashington.
Since November, the work done at Shafton, and presumably at Ashington, has been run down. Men have gone to work every day to find none available. Those workshops are starved of work and are obviously making a loss, so it was easy for the management to decide last

week that they should be shut. The work force were given just a couple of days to decide whether they should accept redundancy and closure, or fight the decision.
Those workers were not offered the same redundancy payments on a maximum of £300 a week as those offered to the employees at the collieries. You, Mr. Deputy Speaker, will know as well as anyone that surface workers earn less than face workers. At the collieries, however, surface workers were given redundancy payments based on a weekly maximum wage of £300—the same as that available to face workers. The work force of the workshops, however, who are on an equivalent grade to that of surface workers, have been denied equal redundancy payments. They have had to settle for lower payments.
The employees at the workshops are being made compulsorily redundant. The only transfer made was that of a team from the Shafton workshop, working on electrical equipment, who went to Bestwood. They set up their own company and were allowed to contract to British Coal, which is now buying from a private company the same work that it bought a few days earlier from its own work force at Shafton. Problems have arisen because the lads now see their former colleagues being kept in work at other workshops and encouraged to form private companies.
The men are offered no choice of transferring because of the distances involved between Shafton, Bestwood and Ashington and because no jobs are available at those workshops.
Shafton also has a problem because its apprentices—there are about nine of them—either have to maintain their apprenticeships by travelling 50 miles to work in Nottinghamshire, or give up their indentures and pack in. That is a difficult choice. Why can they not be found work at other collieries instead of being forced to transfer to another workshop to continue their training?
The Government's decision to close the industry is dictated by pure recklessness and arrogance. I agree with the hon. Member for Stafford (Mr. Cash). The abuse to which he was subjected from fellow Conservative Back Benchers, when he was only making honest comments and sticking up for his constituents, was disgraceful. The Government pay no regard to miners, their families or their communities. They are to be destroyed by an arrogant Government in revenge for what happened in 1974. Everything can be traced back to the Heath Government, which the National Union of Mineworkers was blamed for bringing down in 1974.
I should like to refer briefly to the mineworkers' pension scheme. There is much anger at the way in which British Coal has taken pension holidays. It is feared that the Government, as in the case of other pension schemes, will take this one over and seize its assets, which are worth about £14 billion, for the purpose of helping to deal with the public sector borrowing requirement, and will then pay pensions as they fall due. There is also a great deal of anger with regard to the managers' superannuation scheme. About £400 million is earmarked to pay for redundancies. People in management grades have come to my surgeries to say how incensed they are, not only at being made redundant but at the fact that their pension fund is to be used to provide the funds. Those people are worried about pension provision. The Government ought to reconsider their position. Pension schemes should be untouched, and redundancies paid for by other means.

Mr. Harry Barnes: In the case of Markham pit, which has just been closed, some workers were told that they could have jobs in the north-east of England, provided that they were prepared to go without transfer arrangements or any financial provision, and either find accommodation or travel daily from Derbyshire. That was an impossible situation, yet the redundancy was interpreted as being voluntary rather than compulsory.
My hon. Friend the Member for Bolsover (Mr. Skinner) revealed that he had worked in the Parkhouse pit at Clay Cross, which was closed in 1962. Since that time, there has not been an operational pit in the immediate vicinity of Clay Cross, but many local people work in surrounding pits, which have become known as cosmopolitan pits. People travel to Bolsover, Shirebrook and Markham. Now that those collieries have been hit, there is a problem.
I should like to quote from a report issued by social services officers in Derbyshire. Referring to the situation in Danesmoor—an area of Clay Cross not far from the home of my hon. Friend the Member for Bolsover—the report quotes a shopkeeper and comments:
'We sell disposable nappies in ones, as we do eggs. We also sell coal in bags. It is an expensive way of shopping but people cannot afford to buy in bulk.' This reveals the nonsense of unsold coal stocks whose sale could be subsidised to meet people's needs.
The shopkeeper goes on to say: 'the only fresh meat we sell is sausages.
Children often shop for their parents when they come home from school. Their meals appear to consist of potatoes, baked beans and eggs.'
Concluding, he said: 'I like the people around here. They are friendly, honest and straight. Most of them are struggling against poverty.'".
What we are talking about is the removal of jobs and opportunities and the consequent increase in deprivation. There is such deprivation throughout my constituency and the constituency of Bolsover, and nothing is being done to deal with it. Certainly British Coal Enterprise, which talks about job opportunities but not about jobs, is doing nothing. We cannot find out what jobs are supposed to be being provided in Derbyshire, North-East, in Chesterfield, in Bolsover or in any other constituency affected by the current closure programme.

Mr. Martin O'Neill: In some respects, this debate is more specific than the previous one, as it deals with various expenditure covered by the order and covers redundancy and early retirement. Several hon. Members have already spoken of the problems of poverty and uncertainty, which are the hallmark of this post-industrial society.
Many people receive money that they think that they can use for specific purposes like paying off their mortgage, but they find that the social security regulations prevent them from doing so. Others find that, before they even reach that position, they must choose to end their employment if they are to get a reasonable sum in the form of a redundancy payment.
The first point that I wish to make relates not to the social security regulations, to which my hon. Friend the Member for Bolsover (Mr. Skinner) referred in the previous debate, but to the redundancy payment scheme.

It would appear that a number of collieries may run into difficulties of some kind. Whenever there is a problem in a coalfield, we come across what has become known as the "moveable fault syndrome". A fault appears out of nowhere and is of such complexity that the colliery manager cannot guarantee that the workers will be able to go through that fault quickly. He therefore suggests that, for geological reasons, the colliery must close. No sooner does it close than a similar fault emerges in a neighbouring colliery and similar problems then arise.
I am sure that you, Mr. Deputy Speaker, know from your experience in the coal industry that it creates considerable cynicism within the work force in the area when, conveniently, another geological problem appears just when British Coal no longer requires the services of a particular coalfield or colliery, for whatever reason.
If we are to remove the gun of redundancy payments from miners' heads, and if they are to be allowed an opportunity to work through the geological faults that can arise, it would seem reasonable that the 31 December deadline for the expiry of the enhanced redundancy scheme be extended well into next year. If we are serious about the future of the 12 collieries, it is only reasonable that the men who work in them be granted an extension of the redundancy payment scheme.
My hon. Friend the Member for Deryshire, North-East (Mr. Barnes) has already discussed the problem of changes of work and place of employment. We have all heard stories about miners' difficulties with payment of money that would enable them to move from one colliery to another. If the Minister cannot answer this point tonight, it would be helpful if he could write to us. We realise that he is concerned with a number of matters, but when we discuss such matters of detail it is distressing that he often seems to be unaware of issues that are significant to those most directly affected by the Government's policies.
Assistance for removal expenses was one of the hallmarks of redundancies in the 1960s and 1970s. The fact that money was available for such purposes at that time is one of the reasons why the transfer of labour in the coal industry was achieved comparatively painlessly. It is not available now and, in some respects, the need is even more desperate than it was then.

Mr. Thomas Graham: In my constituency, staff of the Royal Ordnance factory who took redundancy have now waited more than six months to receive unemployment benefit. Some of the miners were forced into taking redundancy payment. It is often months before some of the folk receive the unemployment benefit to which they are entitled.

Mr. O'Neill: My hon. Friend makes a valid point. The only difficulty is that the Minister will immediately try to side step the issue on the ground that it is not his Department's concern. However, his Department is responsible for the fact that if, when people go for unemployment benefit or income support, the officials at the local office refuse to grant it, considerable time elapses before the appeals procedures are set in motion. In that time, considerable suffering and difficulty arise.
One issue which has already been mentioned by my hon. Friend the Member for Barnsley, Central (Mr. Illsley) merits closer consideration, and this is the appropriate debate in which to discuss it—I refer to early retirement and the handling of British Coal's staff superannuation


scheme. The subject is causing considerable disquiet to people who work in the coal industry and to beneficiaries of the scheme.
At present, there is a dispute involving £481 million, a debt owed to the scheme which is regarded in the scheme's books as an asset. At least 90 per cent. of the money should have been repaid by the government through social cost grants such as we are discussing. If the grant had been paid, the staff's superannuation fund would have been that much higher.
As I understand it, under Government pressure, British Coal is seeking to offset the £481 million against its share of the £1 billion surplus provided under the scheme's rules. British Coal is currently enjoying a normal contributions holiday to its staff fund until April 1997. It no longer pays normal contributions to the scheme. Despite that, British Coal has the ultimate power to decide the rules on how the scheme's surpluses are to be distributed. That raises the question of who should control the pension fund assets and who should have the power to decide how the surpluses are used.
Following the scheme's draft actuarial valuation, the trustees proposed that British Coal should run down its share of the surplus by extending its normal contributions holiday after 1997. However, British Coal would prefer to use its share of the surplus by withholding its stage payments to the scheme for early pensions—effectively enjoying a holiday from additional contributions. Not content with an extended holiday from normal contributions, British Coal is seeking a quicker method of benefiting from the surplus.
The trustees argue that British Coal's proposals would be in breach of the scheme's rules. While they do not question British Coal's right to a share of the surplus, they dispute the way in which British Coal may use its share of the surplus. They claim that while British Coal is allowed to realise its share of the surplus through a holiday, from either normal or deficiency contributions, it is not allowed to take it in the form of a holiday from additional contributions, which should be regarded as a debt owed to the scheme and, therefore, scheme assets. The trustees and British Coal have sought joint clarification in the High Court on the legality of British Coal's proposals. The trustees are unanimous in their opposition to British Coal's proposals to cancel their debt to the fund and in their support for legal action.
I made that point in detail because it is important—two factors have emerged. Almost uniquely, British Coal is successfully uniting all the pension fund trustees in opposing its move to use the funds in a way that the trustees consider inappropriate. The trustees believe that the practical effect would be to disadvantage scheme members by realising British Coal's share of the pension fund surplus sooner rather than later. British Coal's proposal would be detrimental to the staff fund in cash flow terms. The Government are in effect trying to pay for past redundancies at the expense of British Coal pensioners. Pension fund assets should not be used to meet a social cost.
In addition, it might be more prudent of British Coal to wait before realising its share of the surplus. If the value of investment falls, pension fund surpluses can quickly turn into deficits. Moreover, British Coal's pension scheme is characterised by a shrinking work force and an increasing number of beneficiaries. It is important for that point to be on the record. There has been a lot of talk and many

questions on the subject, but this is the first opportunity to raise it properly. The fact that you, Mr. Deputy Speaker, have not interrupted me suggests that it is also in order to discuss that matter.
Many hon. Members have elderly constituents who are extremely worried about their pension arrangements and their poll tax and council tax bills. The active and alert elderly in particular seek clarification. They are extremely annoyed at what they see as a Government-inspired attempt to take prematurely from the pension fund something to which the Government are not entitled at this stage.
In discussions about retraining and re-employment, reference has been made to British Coal Enterprises, which has made a number of extravagant claims that do not bear close scrutiny. A report published jointly by the Coalfield Communities Campaign and Wakefield and Barnsley councils of miners examined a BCE claim that, in the year ended 31 March 1992, 67,347 opportunities were created; business funding was provided for 3,300 projects, with the expectation that they would create 39,000 jobs; 11,200 jobs were created through managed work spaces; and the employment advisory service created opportunities for 25,000 people.
Much of that work was not the sole responsibility of British Coal Enterprises. In a number of instances, money was made available and BCE merely provided top-up funding. Some businesses relocated in areas in which British Coal Enterprises was operating, and in effect moved in jobs from elsewhere. One characteristic of small businesses is that they have a higher failure rate than larger businesses and the employment that they offer can be regarded as non-permanent. Some 90 per cent. of the jobs available are in that category.
As to placements, in a study of 284 people, 52 were in continuous employment for 18 months, whereas 232 were out of work for an average of 18 months. Ten per cent. of those who got work had a fall in take-home pay of between £70 and £100 a week. Only those who returned to the coal industry to be employed by contractors carrying out additional work received higher pay than previously.
I am trying to qualify the praise for British Coal Enterprise. Some of us have in our constituencies projects that have benefited from the largesse and support of British Coal Enterprise. However, we are not blind to the fact that some of the funded schemes have considerable limitations. Not all the jobs go to people who have worked in the coal industry, because some of those who are employed are in business in coal mining areas. The Opposition are prepared to give a fair wind to the grants, but we have some reservations about the way in which money has been spent.
In a contracting industry that is under considerable strain, we must look at one other issue—the position of the social welfare organisation that will also be funded under these arrangements. The Coal Industry Social Welfare Organisation has a budget of more than £2 million and consists of a plethora of organisations. There is much nervousness throughout CISWO about the prospect of coal privatisation. It is feared that the trusts could be severely threatened by some kind of catch-all legislation.
This may be the last coal debate before the presentation of privatisation measures. Whether they will be passed is open to question, but there is no questioning the fact that there is considerable anxiety within CISWO about the Government's intentions towards the organisation's


unique place in the industry. I say unique, because CISWO continues to enjoy the unalloyed support of British Coal management, and probably no other part of the industry enjoys such strong backing. A clearer indication of the Government's support for that important organisation would be helpful. I appreciate that the hour is late and that the Minister may not have the necessary information to hand. If he cannot reply to that in the debate, perhaps he will write to me.
The Coal Industry Social Welfare Organisation is not a peripheral body. We have heard much in the debate, not least from the hon. Member for Stafford (Mr. Cash), about the importance of retaining and sustaining coalfield communities. There are in those communities many elderly people and others who suffer from serious illness as a consequence of service to the coal industry. Those people depend in a variety of ways on the activities of CISWO, and I shall give a few examples. Some 1,280 seriously disabled mineworkers are assisted with holidays, 218 seriously disabled people are provided with specific household items to improve the quality of life, and 2,333 seriously disabled people are provided with assistance for days out and the like.
Facilities are made available to such people under grants through measures such as those that we are considering. It is important to hear about the Government's intentions for that organisation. I hope that at some stage the Government will tell us about the other issues that have been raised in the debate, such as redundancy and early retirement, changes of work and places of employment, retraining and new employment. If we receive assurances on those matters, we will not object to the order.

Mr. Eggar: With the leave of the House, Mr. Deputy Speaker. I am sorry that the hon. Member for Bolsover (Mr. Skinner) has left us, because I had intended to draw attention—[Interruption.] The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) can pretend that he is the hon. Member for Bolsover, although he does not look exactly the same. The trousers of the hon. Member for Bolsover stay up rather more easily than his. I had intended to draw the attention of the House to a rather curious fact.
The hon. Member for Bolsover is well known as an opponent of the European Community, so I was surprised to receive in my post the other day a letter from him that covered a letter from Mr. Arthur Scargill of the National Union of Mineworkers. The House may be interested to know that the hon. Member for Bolsover has apparently thrown aside all his views on the EC. He asked me, on behalf of the Government, to ensure that the NUM got funding from the European Community as part of the attempt to introduce redundancy payments because of the contraction of the NUM. It seems that that was a classic clash of the hon. Gentleman's principles. On the one hand, there is his allegiance to the union, about which we all know, and, on the other, there is his concern about the EC.
If I had got to that point, I might have been able to prevent the slight lapse of humour of my hon. Friend the Member for Stafford (Mr. Cash). If my hon. Friend re-reads his speech tomorrow morning, or the day after, he

may reflect on whether using the tone and language that he chose to use this evening was really the best way in which to persuade his colleagues in the Government to see his point of view.
Perhaps I was too generous to my hon. Friend in accepting the praise heaped on him by the hon. Member for Bolsover, who claimed that my hon. Friend had a grasp of detail. I do not think that my hon. Friend's contribution tonight could entirely be said to portray accurately his grasp of detail. Indeed, some might say that the speech was somewhat incoherent, somewhat contradictory and somewhat ill-informed. Some might even say that his speech betrayed ignorance of what had been going on at the Trentham pit, whose interests he claims to have furthered in recent weeks.
My hon. Friend appears to be unaware of the fact that my right hon. Friend the Minister for Industry met other hon. Members who have interests in the Trentham pit and that, subsequent to that meeting, they accepted that my right hon. Friend had made a number of important announcements that benefited the area, such as the announcement of £7 million for English Estates, £7 million via Staffordshire training and enterprise council for a package of employment-related measures and £800,000 from the coalfield area fund. Hon. Members representing Stoke-on-Trent and elsewhere accepted that the Government had responded. I am sorry that my hon. Friend did not feel able to be as generous as other hon. Members.

Mr. Cash: Will my hon. Friend give way?

Mr. Eggar: If my hon. Friend will forgive me, I shall get on. With regard to the points made by the hon. Member for Barnsley, Central (Mr. Illsley) and, indeed, supported—

Sir Teddy Taylor: Will my hon. Friend give way?

Mr. Eggar: With great respect to my hon. Friend, I do not think that he was in the House during the debate. Let me deal with the points that have been raised during the debate.

Sir Teddy Taylor: My hon. Friend has said that the hon. Member for Bolsover (Mr. Skinner) wrote and asked him whether he could have EC funding to help the administration of the NUM. If my hon. Friend raises such questions, he should tell us what he said. Did he say yes or no? That is a simple question.

Mr. Eggar: I have already said in answer to a similar letter from Mr. Arthur Scargill that the Government cannot respond positively to the request from the NUM. I am not sure that I have replied to the hon. Member for Bolsover yet, but I have certainly replied in terms to other hon. Members.

Sir Teddy Taylor: Tell us, then.

Mr. Eggar: Of course. I am delighted that my hon. Friend has been able to draw that information out of me. I had not realised that he was so interested in the answer.
The hon. Member for Barnsley, Central raised the question of British Coal Enterprise. If I may say so, I think that the hon. Member for Clackmannan (Mr. O'Neill) raised it in a rather more balanced way. I must say to the hon. Member for Barnsley, Central that, if British Coal


Enterprise did not exist, he and others would be clamouring for the existence of such an organisation. BCE has made an important contribution to the coalfielcl areas.
The hon. Member for Derbyshire, North-East (Mr. Barnes) made a number of points. I will, as suggested, study the record and ensure that my hon. Friends study what has been said and respond to him. I will also pick up other points in writing.
The hon. Member for Clackmannan spoke about the Coal Industry Socal Welfare Organisation, which is being considered in the context of the privatisation Bill. The hon. Gentleman also raised matters relating to the staff superannuation scheme—typically, in a rather more balanced way than the hon. Member for Livingston (Mr. Cook) did at Easter, when he caused a great deal of unnecessary concern among pensioners.
The application of British Coal's share of the surplus in the staff superannuation scheme is a matter for the corporation. British Coal is right to consider the position of the taxpayer, who is making large contributions to a fund that is heavily in surplus. The corporation will not, of course, proceed further before it has the decision of the High Court. I again repeat that there is no question of the Government taking money from the staff scheme—or, indeed, from any other British Coal pension fund. Staff scheme pensions are not at risk; on the contrary, the beneficiaries' share of the surplus will be used to fund improvements to members' benefits. I am sure that you, Mr. Deputy Speaker, will be particularly interested in that assurance.
This useful debate has enabled us to air a number of concerns. I repeat that I shall respond in due course to any points that I have missed.

Question put and agreed to.

Resolved,
That the draft Coal Industry (Restructuring Grants) Order 1993, which was laid before this House on 24th June, be approved.

Orders of the Day — European Community Documents

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): With permission, I shall put together the motions relating to European Community documents.

Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) ( European Standing Committees).

Orders of the Day — FOODSTUFFS (COLOURING)

That this House takes note of European Community Documents Nos. 4116/92 and 6227/93, relating to colouring in foodstuffs; and supports the Government's intention of negotiating provisions which ensure the safe use of colours in food whilst permitting the continued availability of United Kingdom products in the form in which United Kingdom consumers wish to buy them.

Orders of the Day — STRUCTURAL FUNDS

That this House takes note of European Community Documents Nos. COM(92) 84, 9973/92, 5456/93 and 6006/93,

relating to Structural Funds; and endorses the Government's approach towards the negotiations on the review of Structural Funds regulations.—[Mr. Arbuthnot.]

Question agreed to.

Orders of the Day — Statutory Instruments, &c.

Mr. Deputy Speaker: With permission, I shall put together the motions relating to statutory instruments.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.).

Orders of the Day — CHANNEL TUNNEL

That the draft Channel Tunnel (International Arrangements) Order 1993, which was laid before this House on 24th May, be approved.

Orders of the Day — CIVIL DEFENCE (SCOTLAND)

That the draft Civil Defence (General Local Authority Functions) (Scotland) Regulations 1993, which were laid before this House on 20th May, be approved.

Orders of the Day — DRUG TRAFFICKING PROCEEDS (SCOTLAND)

That the draft Confiscation of the Proceeds of Drug Trafficking (Designated Countries and Territories) (Scotland) Amendment Order 1993, which was laid before this House on 27th May, be approved.

Orders of the Day — OVERSEAS FORFEITURE ORDERS (SCOTLAND)

That the draft Criminal Justice (International Cooperation) Act 1990 (Enforcement of Overseas Forfeiture Orders) (Scotland) Amendment Order 1993, which was laid before this House on 27th May, be approved.—[Mr. Arbuthnot.]

Question agreed to.

Orders of the Day — AGRICULTURE

Ordered,

That Mrs. Angela Browning be discharged from the Agriculture Committee and Mr. Andrew Hunter be added to the Committee.—.[Sir Fergus Montgomery, on behalf of the Committee of Selection.]

Orders of the Day — EDUCATION

Ordered,

That Mrs. Angela Knight be discharged from the Education Committee and Mr. David Lidington be added to the Committee.—[Sir Fergus Montgomery, on behalf of the Committee of Selection.]

Orders of the Day — HEALTH

Ordered,

That Mr. Michael Trend be discharged from the Health Committee and Mr. John Whittingdale be added to the Committee.—[Sir Fegrus Montgomery, on behalf of the Committee of Selection.]

Orders of the Day — TRANSPORT

Ordered,

That Mr. Nigel Evans be discharged from the Transport Committee and Mr. Peter Luff be added to the Committee. —[Sir Fergus Montgomery, on behalf of the Committee of Selection.]

Orders of the Day — Castle Point Borough Council (Capping)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]

Dr. Robert Spink: I am pleased to have the opportunity tonight to explain the capping of Castle Point borough council. I read in my local paper, the Yellow Advertiser, last week that a Conservative councillor is angry because I have not felt able to back the council "to the hilt" on its past financial management. But like my predecessor, Lord Braine of Wheatley, I will always put my constituents' interests and simple justice first and foremost, rather than blindly supporting a council or any other body.
I understand the councillor's frustration, but I am more concerned about the sense of frustration of all my constituents, especially those who find it difficult to meet a high council tax bill and those who previously relied on or benefited from non-statutory services. That frustration is exacerbated by the fact that the council had built itself a reputation for providing high-quality services at a low cost to the local community.
Hon. Members will note that Castle Point is not a profligate council. Councillors have not wilfully overspent, disregarded Government policy or flagrantly embraced hare-brained spending schemes. The problem arose from previous years' errors in budgeting and accounting irregularities, which led to an extraordinary deficit of £2·3 million and which must be corrected in the current year. That is the reason for the council's high budget this year and for the Government capping it.
I should like to set out the facts in three broad sections, because my constituents have a right to know the facts: first, exactly how the deficit arose and what happened to the £2·3 million; secondly, what action the council and the Government have taken to alleviate the problems caused by the deficit; and thirdly what action the council is now taking to ensure that such a problem cannot recur.
I must set the record straight, since politically active groups and individuals in my constituency have been misrepresenting the situation and scaremongering among vulnerable people, who are rightly concerned. The £2·3 million deficit arises largely from incorrect budgeting for interest payable and receivable. The sums amounted to £793,000 in 1991–92 and £980,000 in 1992–93. In addition, other errors in budgeting and in controlling budgets occurred. The main items were an income shortfall of £260,000 for planning and land charges, a £140,000 shortfall on housing account advances and £90,000 depletion of capital plan—the inability to capitalise salaries.
Those sums and a multiplicity of lesser variations make up the total deficit of £2·3 million. The money has not been stolen; it has not gone missing, or even been lost. It was spent on services in Castle Point—services to the people and the community of Castle Point. It was money spent over and above the amount that was collected by the council.
So who is responsible for this problem? To make errors in budgeting is not, to coin a phrase, a hanging offence. It is usual for budgets to show variances in outturns. Budgets are simply financial plans and need to be managed like any other plans. I do not unduly blame the former finance

director for those errors, but he must carry some blame for his failure to manage the budget variances and for failing to report them to senior colleagues or to councillors.
He must, however, carry the whole blame for hiding those deficits by using irregular and improper accounting practices over a long period. The council's auditors, Ernst and Young, and the independent financial consultants, Binder Hamlyn, concluded that there were accounting irregularities. On 5 November 1992, external auditors informed the chief executive of the council that an illegal transfer of funds between accounts had taken place and that this was the responsibility of the former finance director, who as late as last October had still failed fully to advise the council of its financial position.
A chronological report giving the precise timings of the various events was provided and published in full by the chief executive at the council meeting of 14 June, so I shall not trawl through those facts now.
Councillors are fully accountable, but they did not know of the deficit in time to act to prevent it from accruing. All fair-minded people will acknowledge that councillors could hardly act to resolve the situation when they simply could not have been aware of it, since they were misled by the information given by the former finance director, which they accepted in good faith and had no reason to disbelieve—until of course, the auditor drew attention to the problems.
Nevertheless, councils must and do fully accept their accountability. The former finance director was retired on health grounds at the end of last year. I regret that: I believe that he should have been suspended, and subsequently forced to explain his actions following the final investigations of the auditors and accountants.
It is not my job to defend the council; my responsibility is to defend my constituents, and in particular to ensure that they have an accurate account of what has happened. I therefore called on the council to publish the definitive Binder Hamlyn report. I am pleased to say that the report was indeed published, in full. I welcome the spirit of openness adopted by the council.
On 9 June, the hon. Member for Thurrock (Mr. Mackinlay) said that the capping of Castle Point council was
the fault of the treasurer.
Like me, he said that we should have a full disclosure.
if something is wrong at Castle Point".—[Official Report, 9 June 1993: Vol. 226, c. 397.]
I trust that Castle Point's openness, and my statement tonight, will help to bring about a full and frank disclosure.
The hon. Member for Thurrock went on to say that he looked forward to hearing from me on the subject; but, curiously, he prevented me from explaining by using up much of the time available in the capping debate. I am sure that you recall the incident, Mr. Deputy Speaker. That is why I am here tonight: I thank you for the opportunity.
I note that the hon. Member for Thurrock has not cared to join us tonight. That is a great shame, because he has not been able to listen to my account. Such curiously paradoxical behaviour is not at all unusual in the hon. Gentleman. For instance, he aspires to be the sole socialist spokesman for all Essex, yet he has not seen fit to move his family home there. Is Essex not good enough for the hon. Gentleman? Does he not like Thurrock? Does he expect his tenure to be very temporary? I guess so—but I digress.
What has the council done to resolve the £2·3 million deficit, as it must in this year's budget? It made difficult decisions to raise more income: for instance, it doubled some car parking charges. It has also dramatically reduced costs and spending—for example, by imposing a moratorium on some discretionary expenditure, such as support for the welfare minibus scheme. The scheme, however, was eventually saved, and is still running.
The maintenance of public toilets was cut, as was the senior citizens' concession. Indeed, it could be said that the council cut everything except the grass. I am pleased to report, however, that so fierce was the public outcry in Castle Point that the council has now resumed a limited grass-cutting programme. My constituents are grateful for that.
The council also reduced staff numbers, and cut salaries across the board—from cleaner to chief executive—by 6 per cent. The councillors reduced their statutory attendance allowances by 6 per cent. Those decisions were made more difficult because Castle Point council, unlike more profligate and unwise councils, has always run a tight ship. There were no easy schemes to be cut, as there were at Harlow, for instance; there were no pots of unused reserves on which to fall back.
The councillors were not at all happy to make such decisions, but in truth they had little choice. They worked hard to alleviate the problem: for instance, on the welfare minibus, individual councillors gave tens and even hundreds of pounds of their own money, and with the help of the whole community they kept the service running.
I am heartened by the magnificent community spirit that has surfaced. Churches, charities and many local organisations responded to my call to help to support the welfare minibuses until normality returns next year. No one has done more than the previous and present mayors of Castle Point, Councillors Bill Dick and Betty Wood, who have led the way and, like many of their fellow councillors, have shown great honour, caring and dignity in a difficult time.
After the first programme of action, the council was able to set a budget of £8,470,300. The Government imposed a spending limit of £7,970,000, so the council had to look again in order to close the gap of £500,300 which was effectively imposed by the capping. I said at the time that the adjustment could be achieved without further major cuts in staff or services, and that the Government had got it about right. Events have shown that to be the case. Indeed, as I said earlier, the grass-cutting programme increased by about £10,000 after the capping.
The £500,000 capping reduction, the £60,000 cost of re-billing, and various other adjustments, have all been met by the council, and the new budget falls some £12,400 below the Government's capping level. Meeting the cap has been achieved by three key actions on the council's part. First, the Minister allowed the council to capitalise previous years' redundancy costs from this year's assets disposal which, in all, will save abut £250,000 in the current year.
Secondly, the council's bankers have rescheduled the councils finances, which will save about £185,000 in the current year. Thirdly, the balance of funds needed was found from many budget income and expenditure adjustments. For example, there is a saving on the homelessness budget as the number of bed-and-breakfast families in Castle Point has fallen from 36 at the turn of the year, which was unacceptable, to zero today.
That is a welcome and worthy achievement by the councillors and the council's officers. In particular, it is the result of the personal drive and dedication of Councillor Malcolm Hume, the chairman of the housing committee. Today, we have a balanced budget. That is why I supported, and was right to support, the Government's capping order.
On behalf of the council's chief executive, Mr. Barry Rollinson, I must pay tribute to Department of the Environment Ministers and officers, who have been tough but fair. They have listened carefully, and been as helpful as they possibly could. They helped by fixing the standard spending assessment in the first place, by giving directions and relaxations when they could, and in the careful setting of the capping level, which, as has been proved, was correct.
I deal now with the action being taken by the council to prevent such a problem from recurring. I assure the House that the council has implemented, and is implementing, every recommendation in the auditors' report. That includes the commissioning of the independent financial consultants Binder Hamlyn, who specialise in local government finance.
The council has rigorously followed the Binder Hamlyn recommendations. New procedures, structures and new and clearer routes of accountability are being implemented and, invigorated by the success of its fundamental short-term review, the council is embarking on a fundamental longer-term review, a further efficiency programme.
That review will consider the large-scale voluntary transfer of council housing to a housing association which will have a great tenant-friendly credentials. I welcome that move very warmly, as it will be of great benefit to the tenants in my constituency. It will give them greater protection and greater control of their situations. I believe that it will also bring lower rents in the longer term.
That review will also consider the contracting out of some financial and accounting functions to a specialised organisation. You will understand, Mr. Deputy Speaker, when I say that I welcome that initiative. The review will also involve a more purposeful market testing of all the council's services, and improved utilisation of all the council's facilities, buildings and assets.
That said, there are still problems to be resolved. I have particularly stressed to the council the need for a more reasonable budgeted collection rate. The council should achieve 97 per cent.—as most will. However, a rate of only 90 per cent. has been set. That has put bills up and rendered transitional relief less effective, and has denied my constituents some of the protections that they should have enjoyed against the increased tax demand. That will result in an over-collection on budget and a surplus in the collection fund. However, that surplus cannot be legally used in the current year.
The surplus does not, and never will, belong to the council. It belongs to my constituents, and it must be returned to them in the following year, by holding their next year's council tax bill even lower than it otherwise would be. The money must not be spent on services or salaries or put into reserves.
Hon. Members will already have calculated that, without the extraordinary deficit of £2·3 million, the council's spending this year would not be the Government-set level of £7·9 million; it would have been only £5·6 million. The calculation is easy: £7·9 million less the £2·3


million deficit that must be met this year leaves £5·6 million only that is being spent on services. I want that low level of spending on services projected into coming years. That extremely low level applied five years ago, and it is a starting point for next year's council tax.
I want to see the greater part of the savings from next year's low spending level passed on to the council taxpayer in lower bills. There should be no general reinstatements of this year's efficiency savings. We have gained them and we must keep those gains. The minor increases necessary in next year's budget that are needed to remove the moratorium on small discretionary items such as the £19 pensioner concessions must come from the longer-term further efficiency programme that I outlined a moment ago.
My hon. Friend the Minister is aware that the process has been difficult for all involved, and especially for my constituents in Castle Point. However, Castle Point council can, and I trust will, emerge more professional and stronger in future years. If it does that, Castle Point will become an excellent model of an enabling authority, providing a high quality and high level of services, at low cost to the council taxpayers. In any event, I should like to express my deep concern about what has happened. I fully understand and share my constituents' sense of frustration.
However, before I finish, I must warn each council taxpayer to continue to pay their current bills in full. New bills will be sent to them with the lower charges following the capping; they will receive them in August or September. Anyone who attempts to delay payment by waiting for those later bills will be under the most severe risk of legal action, with all the additional costs that that legal action will bring on them. I will have no means to protect them from that. I regret having to give that rather negative message, but it is my responsibility to defend my constituents in every possible way.

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): I congratulate my hon. Friend the Member for Castle Point (Dr. Spink) on having set out the issues so clearly. I thank him for the positive and constructive way in which he has approached the issue. It is always difficult to have a local authority in one's own constituency capped. It understandably raises a large number of concerns, and my hon. Friend has dealt with them admirably.
The House will be aware of the process of local government finance—I will not take the House through it, given the time available. However, the House will recognise that, given the proportion of public spending which local government spending represents, local government cannot expect to be exempt from the need for spending restraint in the interests of our wider economic strategy. That is why we have had for some time the powers to enable us to cap local authorities that do not budget sensibly.
Authorities therefore set their budgets in the light of our announced intentions. On 1 April, after authorities had set their budgets, my right hon. and learned Friend the then Secretary of State took his capping decisions, taking account of all relevant considerations. His decisions gave

broad effect to the provisional criteria. It is an indication of the success of the implementation of the council tax and the new realism that exists generally in local government that this year it was necessary to cap only three out of the 419 local authorities.
Alas, one of those three was Castle Point. The proposed cap required a reduction of only £500,000, rather than the full reduction of £1·3 million.
Subsequently, when Castle Point challenged our proposed cap, it became clear to us that the cap that we proposed would be tight. Castle Point had incurred significant redundancy costs in 1991–92 and 1992–93. We had issued a direction allowing those costs to be charged to capital account for 1992–93. However, the authority was unable to generate sufficient capital receipts in that year to provide cover for the full extent of its liability, and therefore only a portion of the cost could be capitalised. A significant amount—some £500,000—remained to be accommodated in the 1993–94 budget, so all of this was difficult.
During the process of challenging the proposed cap, the authority told us that it was planning to generate substantial capital receipts during 1993–94. Were the authority to be able to use some of those receipts to meet intended redundancy costs, those costs would then not fall to be charged against its 1993–94 budget.
We therefore concluded that it would be right to issue a direction to allow the authority to charge an amount of revenue spending to its capital account equal to the outstanding redundancy costs. On that basis, we also concluded that a cap at the level originally proposed would be right for Castle Point.
Castle Point has provided us with the necessary information, and the appropriate direction has been issued. We are satisfied that the cap proposed is reasonable, achievable and appropriate in all the circumstances of Castle Point. I thank my hon. Friend for his comments about it being tough and fair. After consideration, discussion and consultation, we have arrived at a cap that is tough and fair with regard both to Castle Point and to taxpayers generally.
It is for the authority to decide how to live within its cap, but we are satisfied that, as with each of the capped authorities, Castle Point will be able to provide an appropriate level of service if it chooses to do so. I think that my hon. Friend's estimate of the collection rate still needs to be a little more realistic. In fact, I hope that Castle Point will aim to collect 98 per cent. of its council tax. That is the target that we have set for other authorities.
Ideally, no authority would be capped, but we should not let the fact that we had to cap three authorities detract from the achievement of local government this year of successfully introducing the council tax at affordable levels up and down the country. It is encouraging that most local authorities have accepted their responsibility for spending restraint.
I hope that the spirit of co-operation demonstrated with the introduction of the council tax and the realism shown by most authorities will continue. Clearly, councillors and my hon. Friend have worked hard in Castle Point to sort out matters that are not of their own making—

The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-two minutes past One o'clock.